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J Manag Gov (2014) 18:95127
DOI 10.1007/s10997-012-9222-9
Oussama Nheri
Published online: 12 June 2012 The Author(s) 2012. This article is published with open access at Springerlink.com
Abstract This paper aims to provide the determinants of how privatization works in some selected Middle East North Africa countries. Using a sample of 75 new privatized rms we examine the performance changes in countries namely Egypt, Morocco, Tunisia and Turkey. We document a signicant increase in protability, efciency and output as well as a decrease in leverage. We also identify that these improvements vary with economic reforms and environment, effectiveness of corporate governance and the privatization method used. In particular, nancial liberalization and control relinquishment by the government are associated with higher efciency and output. Furthermore, foreign participation and the use of share issue privatization as divestment method appear to have a positive impact on efciency and output changes. Additionally, the use of private sales is related to a signicant decrease in leverage. 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.
Keywords Corporate governance Privatization method Economic reforms
MENA countries Performance
JEL Classication G32 G38
O. Nheri (&)
University of Economics and Management of Tunis-Tunisia, BP 248 El Manar II, 2092 Tunis, Tunisiae-mail: [email protected]
Economic reforms, corporate governanceand privatization method as determinantsin performance changes of new privatized rms: the case of MENA countries
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96 O. Nheri
1 Introduction
Privatization of state-owned enterprises (SOEs) has become an important phenomenon in both developed and developing countries. Over the last two decades, SOEs have been privatized at an increasing rate, particularly in developing countries (DCs). Through these privatization programs, the governments want to (1) raise revenue for the state, (2) promote economic efciency, (3) reduce government interference in the economy, (4) promote wider share ownership, (5) stimulate product market competition, and (6) subject SOEs to capital market discipline (Megginson and Netter 2001).
Several multinational studies have documented a performance improvement of new privatized rms (NPFs) in developed and developing countries. For example, Megginson et al. (1994); Boubakri and Cosset (1998) and DSouza and Megginson (1999) examined the performance of 204 privatized companies in 41 countries. Overall, these studies have documented signicant post-privatization improvements...