The political economy of soe privatization and governance. How important is the concentration of control for the. Corporate governance in this study corporate governance involves control over the firms major policies about production, investment, and the disposition of profit, as well as the selection. Post privatization corporate governance and firm performance. Control privatization, corporate governance, and firm. Specifically, the paper contributes to the existing literature by identifying whether there is a substitute or complementary. Using a panel data for a sample of 20 privatized firms obtained from the nigerian stock.
The impact of privatization on firm performance in a. Analysis of corporate governance and firm performance. Politicallyconnected ceos, corporate governance and postipo performance of chinas partially privatized firms. Politically connected ceos, corporate governance, and the. An investigation of the postprivatization firms financial. Therefore, post privatization performance improves when corporate structures are introduced into the companies. A good example is found in dsouza and megginson 1999. Post privatization corporate governance and the challenges of working capital in nigeria bappayo masu gombe, ph. Effect of institutional and firmspecific characteristics on. The purpose of this paper is to expand understanding of the determinants of performance in newly privatized firms by empirically examining the interaction effect of internal corporate governance and big four auditors in middle eastern and north african countries. Partial privatization and firm performance nandini gupta. We propose an enhanced transparency disclosure index tdi. This begs the question whether these differences influence the effects of the programme on firm performance. This paper exposed an important impact of governance on firms performance.
Additionally, the use of private sales is related to a significant decrease in leverage. The role of private ownership concentration, identity and board composition. Taken together, our results highlight the importance of corporate governance, macroeconomic reforms and environment in explaining the post privatization changes in performance. This article examines the effects of disclosure in corporate governance practices on firm performance, bankruptcy risk, leverage and dividend policy in public listed companies. The design of control and performance evaluation systems in the pre and postprivatization periods is compared so that it can be understood in relation to the changes observed at a high corporate level corporate governance and firm. The persistence of corporate governance cg is to expedite operative and cautious management which can transport the enduring success of the company. Comparison of corporate governance, strategy, control and. Empirical analysis of corporate governance in transition wendy carlin university college london introduction the practical problem of trying to understand the transition has focused attention on the nature of the firm in a capitalist economy and on the role of corporate governance in catchup growth and for economic performance more generally. Baseline estimation of a metaregression model that employs a total of 2894 estimates drawn from 121 previous studies indicated the superior impact of foreign ownership on. The effects of corporate disclosure practices on firm. They need to take into account the corporate governance framework in which the enterprises will operate following the transfer to the private sector. The purpose of this paper is to shed light on the political economy aspects of stateownedenterprises soes governance and privatization in the middle east and north africa mena region.
This study measures the impact of privatization on firm performance in vietnam by comparing the pre. Effect of institutional and firmspecific characteristics. The first compares the pre and postprivatization financial and operating performance. Performance consequences of privatizing egyptian state. In particular, the paper presents an overview of privatization in the region and examines the extent to which soes operate at arms length from the public sector and the motives for this behavior. Post privatization corporate governance and the challenges. Apr 30, 2015 this article examines the effects of disclosure in corporate governance practices on firm performance, bankruptcy risk, leverage and dividend policy in public listed companies. The objective of this article is to disentangle the combined effect of product market competition and corporate governance variables on firm performance. Concentrating on postprivatization internal corporate governance issues, we try to fill this gap by tracking the changes in firm ownership structure and also in the composition of the board of directors while testing their impact on firm performance. The empirical evidence for this assumption comes from two kinds of studies. Increasing participations of managers in firm capital in fact, together with the consolidation of control in the hands of domestic nonfinancial firms and funds, characterize the evolution of ownershipcontrol and determine the corporate governance specifics in the slovenian postprivatization period. Liberalization, corporate governance and the performance.
Corporate governance, competition and firm performance. In general, the corporate governance has become a hot topic for the developing countries because effective and efficient corporate governance can enhance the firm performance by increasing the capital investment from the investors with the fragile governance structures okpara, 2011. Higgins 2003 opined that, one of most useful ways to evaluate trend of firm. The study recommends that, nigerian government should ensure favorable macroeconomic. The did methodology showed that the post privatization performance of firms significantly improved in terms of profitability and productivity. A comparison to the findings of boubakri, cosset, and guedmani 2004 suggests that several determinants of post privatization performance improvements differ. The role of private ownership concentration, identity and board composition, journal journal of comparative economics, year 2009, pages 658673. Debt financing and post privatization performance of firms. We examine and analyze the postprivatization corporate governance of a sample of 52 newly privatized egyptian firms over a period of 10a years, from 1995 to 2005. Since management control is not transferred to private owners it is widely contended that partial privatization has little impact.
The document does not propose a common definition of what constitutes privatisation. The purpose of this study is to investigate the role of corporate governance practices on the postprivatization financial performance of the firms listed on the nigerian stock exchange nse over the period 20052014. Key elements in postprivatization restructuring include changes in corporate governance, management, labor and capital inputs, and outputs. Corporate governance and the performance of privatized. Internal corporate governance and financial performance nexus. We find that the government relinquishes control over time, mainly to the benefit of local institutions and foreign investors. On the narrow perspective, firm performance is the degree to which a corporation accomplishes its goal or objectives and successfully harness is resources needed from the. Assessing the governance mechanisms, corporate social. Liberalization, corporate governance and the performance of. This study also examined the differences in performance before and after privatization on specific subsamples of the data which is based on privatization. The aim of this paper is compare corporate governance and firm strategy before and after privatization. Second, common motive of government is to generate revenue, and privatizing firms are the realistic system to raise funds lipton and sachs, 1990. We calculate the mean value of each variable for each firm over the pre and post privatization periods, we then use the t test and the wilcoxon sign rank test as principal methods of testing for significant changes in the variables. This study examines the impact of debt financing on the performance of privatizedfirms in nigeria.
First, it attempts to examine the joint impact of corporate governance mechanisms and corporate social responsibility csr practice on firm performance. This paper aims to perform a metaanalysis of the relationship between post privatization ownership and firm performance using a large database of the transition literature. The complementarysubstitution effects of postprivatization. Does privatization increase firm performance in nigeria. We calculate the mean value of each variable for each firm over the pre and post privatization periods, we then use the t test and the wilcoxon sign rank test as principal methods of testing for significant changes in. In particular, we document that economic growth and stock market liberalization are associated with stronger profitability and efficiency gains and greater output increases. Performance consequences of privatizing egyptian stateowned.
The study uses a panel data obtained from the nigerian stock exchange and securities and exchange commission during the period 20022009. Our ordinary least square ols results suggest that corporate financing through debt tends to increase postprivatization performance of firms up to a. Economic reforms, corporate governance and privatization. The role of private ownership concentration, identity and board composition, journal of comparative economics 37, 658 673. Postprivatization corporate governance and firm performance. Internal corporate governance and financial performance. Section ii presents the conceptual framework of corporate governance and links it to the egyptian experience. Post privatization corporate governance and the challenges of. This study examines the impact of corporate governance variables on nonperforming loans of nepalese commercial banks. Concentrating on post privatization internal corporate governance issues, we try to fill this gap by tracking the changes in firm ownership structure and also in the composition of the board of directors while testing their impact on firm performance. Corporate governance in this study corporate governance involves control over the firms major policies about production, investment, and. The role of private ownership concentration, identity and board composition article in journal of. This paper aims to perform a metaanalysis of the relationship between postprivatization ownership and firm performance using a large database of the transition literature. Jun 03, 2019 the purpose of this study is to investigate the role of corporate governance practices on the post privatization financial performance of the firms listed on the nigerian stock exchange nse over the period 20052014.
The impact of corporate governance on efficiency of. We investigate the role of ownership structure and investor protection in postprivatization corporate governance. The role of private ownership concentration, identity and board composition, working papers 495, economic research forum, revised jun 2009. The key contribution of this study to governance literature is that. Partnership for corporate governance and secondary. This study contributes to the existing literature in two ways. In addition to firm level variables, investor protection, political and social. We examine and analyze the postprivatization corporate governance of a sample of 52 newly privatized egyptian firms over a period of 10 years, from 1995 to 2005. Postprivatization, corporate governance and firm performance. Earnings per share eps the data is divided into two samples, where one sample consists of pre privatisation data and the other one consists of post privatization data. Baseline estimation of a metaregression model that employs a total of 2894 estimates drawn from 121 previous studies indicated the superior impact of foreign ownership on firm performance in comparison with. Sep 15, 2018 this study examines the impact of corporate governance variables on nonperforming loans of nepalese commercial banks. Corporate governance, and financial markets, and the 2003 american economic.
The dependent variables are ratio of nonperforming loan and cost efficiency. In addition to firmlevel variables, investor protection, political and social. To identify the factors affecting corporate governance efficiency on the performance of privatized cement companies, performance trend analysis was employed. Privatization, governance mechanism consistent with capital market regulations, and firms performance dominant government ownership leads to high government intervention for the firm to serve social objectives, such as. To measure disclosure and transparency more accurately, we use the recommended practices of the malaysian code on corporate governance 2012 mccg 2012, using. The effect of incentive system and corporate governance. Using 5 publicly listed firms that china privatized via control transfer from 1998 to 2005 as a sample, we investigate whether newly privatized firms enhance incentives of top management and employees and, consequently, whether postprivatization firm performance is improved. Nov 22, 2004 our data indicate that ownership both private and foreign, degree of economic freedom, and level of capital market development significantly affect post privatization performance. This paper examined the validity of the efficacy of privatization by investigating not only whether privatization has improved financial profitability performance of firms but also whether such improvement has impact on the operational efficiency of privatized firms for the period 19902001 in nigeria. Finally our results highlight the importance of economic reforms, corporate governance and the choice of privatization method in explaining the post privatization changes in performance.
Effect of institutional and firmspecific characteristics on postprivatization performance. The performance of any firm or bank is vibrantly enhanced by corporate governance. Abstract most privatization programs begin with a period of partial privatization in which only noncontrolling shares of firms are sold on the stock market. The design of control and performance evaluation systems in the pre and post privatization periods is compared so that it can be understood in relation to the changes observed at a high corporate level corporate governance and firm. Debt financing and postprivatization performance of firms. Empirical analysis of corporate governance in transition. The study concludes that, there are other factors affecting firm performance more than corporate governance and that post privatisation corporate governance has negative and significant impact on the profitability. We also show that private ownership tends to concentrate over time. The impact of corporate governance on efficiency of nepalese. To measure disclosure and transparency more accurately, we use the recommended practices of the malaysian code on corporate governance 2012 mccg. In addition, it disentangles ownership structure provision to ownership concentration and foreign ownership and investigates which component of ownership structure stands behind the. The role of private ownership concentration, identity and board composition november 25, 2008.
The independent variables are board size, independent directors, audit committee member, foreign ownership, domestic ownership, ceo duality, bank age. While the linkage between internal governance mechanism and firm performance is well established in several studies, the interaction between internal and external governance mechanism has. Debt financing, firm performance, capital structure, post privatization, nigeria. We look at the ownership structure that results from privatization and its evolution. This study aims to examine the impact of aggregate and individual corporate governance provisions on firm performance on all firms listed at damascus securities exchange dse for the period between 2011 and 2015. We observe the pre and postprivatization performance of 40 firms partially privatized by the federal government and two firms sold by regional. G financial economics g3 corporate finance and governance g38 government policy and regulation. In developing countries, the relationship between privatization and corporate governance has been analyzed by boubakri et al. The role of private ownership concentration, identity and board composition article in journal of comparative economics 374. May 24, 2006 this begs the question whether these differences influence the effects of the programme on firm performance. The evaluation of postprivatization performance in.
This study contributes to the existing literature in two. Taken together, our results highlight the importance of corporate governance, macroeconomic reforms and environment in explaining the postprivatization changes in performance. Using 5 publicly listed firms that china privatized via control transfer from 1998 to 2005 as a sample, we investigate whether newly privatized firms enhance incentives of top management and employees and, consequently, whether post privatization firm performance is improved. We provide a summary of selected empirical studies on privatization and corporate governance with findings in section iii.
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