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An Investigation on the Performance of Operating Profit Margin of Privatized SOEs

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  • Magaji Abubakar Muhammad

Abstract

The economic crisis facing Nigeria has been blamed on mismanagement, inappropriate economic policies and public enterprises had been identified as one of such inappropriate policies. Market mechanism and private ownership are now the dominant development strategy. The economic and physical problems at the time of impendence necessitate the expansion of state owned enterprises. The technical committee on privatization and commercialization valued the state owned enterprises at 500 billion in 1993. The paper uses mean comparison method of analysis. The method measures the differences between the samples. Secondary data collected from the thirty five sampled companies is used. The financial data for the period of ten years is used for the analysis. The analysis is done to evaluate where the sampled companies have experience operative profit margin change in the mean difference after privatization. The companies in the oil marketing industry have generally indicated increase in the mean difference. Similarly, companies in the manufacturing sector recorded operative profit margin increase after privatization. The trend is recorded in the insurance and banking sectors.

Suggested Citation

  • Magaji Abubakar Muhammad, 2016. "An Investigation on the Performance of Operating Profit Margin of Privatized SOEs," International Journal of Academic Research in Business and Social Sciences, Human Resource Management Academic Research Society, International Journal of Academic Research in Business and Social Sciences, vol. 6(6), pages 221-230, June.
    • Handle: RePEc:hur:ijarbs:v:6:y:2016:i:6:p:221-230
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    References listed on IDEAS

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    1. Megginson, William L & Nash, Robert C & van Randenborgh, Matthias, 1994. "The Financial and Operating Performance of Newly Privatized Firms: An International Empirical Analysis," Journal of Finance, American Finance Association, vol. 49(2), pages 403-452, June.
    2. Afeikhena Jerome, 2008. "Privatization and Enterprise Performance in Nigeria: Case Study of Some Privatized Enterprises," Working Papers 175, African Economic Research Consortium, Research Department.
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