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The impact of slow privatisation in the beverage and textile industry in Eritrea


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  • Hailemariam, Stifanos
  • Eije, Henk van

    (Groningen University)

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    In many developing countries the privatisation of state owned enterprises is receiving increased attention but the selling of the enterprises is difficult. In Eritrea state owned enterprises were offered for sale at the end of 1996, but many of the relatively large companies are not privatised yet. This created the possibility to study the impact of slow privatisation in a developing country. After the privatisation announcement the state owned enterprises in both the profitable beverage industry as well as in the unprofitable textile industry showed negative effects on profitability. Moreover, managers in both industries complained about slow privatisation, but the complaints were different. In the profitable beverage industry privatisation frustrated the orientation on the future because the privatisation authorities restricted investments. The managers of the loss making textile industry were more involved with survival and they complained about the long duration of privatisation that made it impossible to get outside financing quickly.

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    Bibliographic Info

    Paper provided by University of Groningen, Research Institute SOM (Systems, Organisations and Management) in its series Research Report with number 01A21.

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    Date of creation: 2001
    Date of revision:
    Handle: RePEc:dgr:rugsom:01a21

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    1. Ravi Ramamurti, 1992. "Why are Developing Countries Privatizing?," Journal of International Business Studies, Palgrave Macmillan, vol. 23(2), pages 225-249, June.
    2. repec:reg:rpubli:398 is not listed on IDEAS
    3. Barbara G. Katz & Joel Owen, 1993. "Designing an Optimal Privatization Plan for Restructuring Firms and Industries in Transition," Working Papers, New York University, Leonard N. Stern School of Business, Department of Economics 93-24, New York University, Leonard N. Stern School of Business, Department of Economics.
    4. J Earle & S Estrin & L Leshchenko, 1996. "Ownership Structures," CEP Discussion Papers, Centre for Economic Performance, LSE dp0315, Centre for Economic Performance, LSE.
    5. Ariyo, Ademola & Jerome, Afeikhena, 1999. "Privatization in Africa: An appraisal," World Development, Elsevier, Elsevier, vol. 27(1), pages 201-213, January.
    6. Yarrow, George, 1999. "A theory of privatization, or why bureaucrats are still in business," World Development, Elsevier, Elsevier, vol. 27(1), pages 157-168, January.
    7. repec:reg:wpaper:398 is not listed on IDEAS
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