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Privatization and performance: evidence from telecommunications sector

Author

Listed:
  • M Ariff

    (Bond University, Australia and University of Tokyo)

  • E Cabanda

    (Regent University)

  • M Sathye

    (University of Canberra)

Abstract

There is a continuing debate on whether or not ownership changes accompanying privatization of state-owned enterprises (SOEs) lead to performance improvements of such firms. Since profitability measures alone are possibly inappropriate for SOEs, we address this very significant current question using a novel approach. We test the performance of a large sample of telecommunication firms around the world, 4 years before and 4 years after privatization, using two parallel measures namely financial performance measures and production performance measures. Our purpose is to identify if both approaches could corroborate stronger evidence for or against maintained hypothesis of performance improvements after privatization. The overall finding for this industry indicates significant improvements in both financial and production performance after privatization. Further research is warranted to extend this parallel-methods approach to firms in other industries.

Suggested Citation

  • M Ariff & E Cabanda & M Sathye, 2009. "Privatization and performance: evidence from telecommunications sector," Journal of the Operational Research Society, Palgrave Macmillan;The OR Society, vol. 60(10), pages 1315-1321, October.
    • Handle: RePEc:pal:jorsoc:v:60:y:2009:i:10:d:10.1057_jors.2008.103
    DOI: 10.1057/jors.2008.103
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    References listed on IDEAS

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    Cited by:

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    2. Karamti, Chiraz, 2019. "Lopsided effects of telecom reforms on mobile markets in the enlarged EU: Evidence from dynamic quantile model," Telecommunications Policy, Elsevier, vol. 43(3), pages 238-261.
    3. Julieta Llungo-Ortiz, 2014. "Privatization of telecommunications in Latin America, an analysis of its efficiency," ERSA conference papers ersa14p1455, European Regional Science Association.

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