The effects of privatization on the performance of newly privatized firms in emerging markets

Our study examines changes in the financial and operating performance of 103 firms worldwide that were privatized through public share offerings during 1993-2003 in both emerging markets and developed countries. The empirical results from the Wilcoxon and proportion tests show increases in profitability, operating efficiency, capital spending, output, and dividend payments as well as decreases in leverage and total employment. Our results indicate that privatization helps improve firm performance in a wide variety of countries, industries, and competitive environments.