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. 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. Sep 15, 2018 this study examines the impact of corporate governance variables on nonperforming loans of nepalese commercial banks. This paper exposed an important impact of governance on firms performance. Performance consequences of privatizing egyptian state. The key contribution of this study to governance literature is that. 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 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. The role of private ownership concentration, identity and board composition article in journal of. May 24, 2006 this begs the question whether these differences influence the effects of the programme on firm performance. The role of private ownership concentration, identity and board composition, working papers 495, economic research forum, revised jun 2009. Higgins 2003 opined that, one of most useful ways to evaluate trend of firm. Taken together, our results highlight the importance of corporate governance, macroeconomic reforms and environment in explaining the post privatization changes in performance.
Since management control is not transferred to private owners it is widely contended that partial privatization has little impact. Liberalization, corporate governance and the performance of. 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. 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 effects of corporate disclosure practices on firm. Corporate governance and the performance of privatized. Post privatization corporate governance and the challenges of. Postprivatization corporate governance and firm performance. This begs the question whether these differences influence the effects of the programme on firm performance. Does privatization increase firm performance in nigeria. 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. Our ordinary least square ols results suggest that corporate financing through debt tends to increase postprivatization performance of firms up to a. Internal corporate governance and financial performance. In addition to firm level 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. The first compares the pre and postprivatization financial and operating performance.
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. Analysis of corporate governance and firm performance. The effect of incentive system and corporate governance. Internal corporate governance and financial performance nexus. 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 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. This study contributes to the existing literature in two. 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 empirical evidence for this assumption comes from two kinds of studies. How important is the concentration of control for the. This study contributes to the existing literature in two ways. This study examines the impact of debt financing on the performance of privatizedfirms in nigeria. The study recommends that, nigerian government should ensure favorable macroeconomic. A comparison to the findings of boubakri, cosset, and guedmani 2004 suggests that several determinants of post privatization performance improvements differ. The evaluation of postprivatization performance in. 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. Assessing the governance mechanisms, corporate social. Performance consequences of privatizing egyptian stateowned. Economic reforms, corporate governance and privatization. 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.
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. This study examines the impact of corporate governance variables on nonperforming loans of nepalese commercial banks. 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. The did methodology showed that the post privatization performance of firms significantly improved in terms of profitability and productivity. 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. Effect of institutional and firmspecific characteristics on. 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. Second, common motive of government is to generate revenue, and privatizing firms are the realistic system to raise funds lipton and sachs, 1990. The role of private ownership concentration, identity and board composition, journal journal of comparative economics, year 2009, pages 658673. The complementarysubstitution effects of postprivatization. Effect of institutional and firmspecific characteristics on postprivatization performance. First, it attempts to examine the joint impact of corporate governance mechanisms and corporate social responsibility csr practice on firm performance. 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.
This study also examined the differences in performance before and after privatization on specific subsamples of the data which is based on privatization. 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. Empirical analysis of corporate governance in transition. To measure disclosure and transparency more accurately, we use the recommended practices of the malaysian code on corporate governance 2012 mccg 2012, using. The role of private ownership concentration, identity and board composition, journal of comparative economics 37, 658 673. Therefore, post privatization performance improves when corporate structures are introduced into the companies. Corporate governance in this study corporate governance involves control over the firms major policies about production, investment, and. We investigate the role of ownership structure and investor protection in postprivatization corporate governance.
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. Postprivatization, corporate governance and firm performance. Debt financing and post privatization performance of firms. An investigation of the postprivatization firms financial. This article examines the effects of disclosure in corporate governance practices on firm performance, bankruptcy risk, leverage and dividend policy in public listed companies. Specifically, the paper contributes to the existing literature by identifying whether there is a substitute or complementary. The aim of this paper is compare corporate governance and firm strategy before and after privatization. The impact of corporate governance on efficiency of nepalese. In particular, we document that economic growth and stock market liberalization are associated with stronger profitability and efficiency gains and greater output increases. A good example is found in dsouza and megginson 1999. Key elements in postprivatization restructuring include changes in corporate governance, management, labor and capital inputs, and outputs. The impact of corporate governance on efficiency of. Corporate governance, competition and firm performance. Debt financing and postprivatization performance of firms.
To measure disclosure and transparency more accurately, we use the recommended practices of the malaysian code on corporate governance 2012 mccg. Effect of institutional and firmspecific characteristics. We also show that private ownership tends to concentrate over time. Control privatization, corporate governance, and firm. The role of private ownership concentration, identity and board composition. The persistence of corporate governance cg is to expedite operative and cautious management which can transport the enduring success of the company. 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. The performance of any firm or bank is vibrantly enhanced by corporate governance. The objective of this article is to disentangle the combined effect of product market competition and corporate governance variables on firm performance. Using a panel data for a sample of 20 privatized firms obtained from the nigerian stock.
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. 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. We look at the ownership structure that results from privatization and its evolution. 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. This paper aims to perform a metaanalysis of the relationship between postprivatization ownership and firm performance using a large database of the transition literature. Post privatization corporate governance and the challenges. They need to take into account the corporate governance framework in which the enterprises will operate following the transfer to the private sector. 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. We find that the government relinquishes control over time, mainly to the benefit of local institutions and foreign investors. 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. Politicallyconnected ceos, corporate governance and postipo performance of chinas partially privatized firms. Additionally, the use of private sales is related to a significant decrease in leverage. The political economy of soe privatization and governance. 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.
Section ii presents the conceptual framework of corporate governance and links it to the egyptian experience. 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. In developing countries, the relationship between privatization and corporate governance has been analyzed by boubakri et al. Partial privatization and firm performance nandini gupta.
Comparison of corporate governance, strategy, control and. Politically connected ceos, corporate governance, and the. 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. The dependent variables are ratio of nonperforming loan and cost efficiency. Corporate governance, and financial markets, and the 2003 american economic. We propose an enhanced transparency disclosure index tdi. The study uses a panel data obtained from the nigerian stock exchange and securities and exchange commission during the period 20022009. The role of private ownership concentration, identity and board composition article in journal of comparative economics 374. Liberalization, corporate governance and the 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 postprivatization firm performance is improved. Debt financing, firm performance, capital structure, post privatization, nigeria. Abstract most privatization programs begin with a period of partial privatization in which only noncontrolling shares of firms are sold on the stock market.
We observe the pre and postprivatization performance of 40 firms partially privatized by the federal government and two firms sold by regional. 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. Post privatization corporate governance and firm performance. 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. The impact of privatization on firm performance in a.
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