Short-term Impact of Privatization on Firm Performance in Ethiopia (The Case of Leather Industry)
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Date
2012-06
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A.A.U
Abstract
Privatization is a very recent experience in Ethiopia though it is a worldwide phenomenon
ill the past three decades. This study aimed at investigating the potential impact of
privatization on the financial and operating performance of State Owned Enterprises
(SOEs) in the Leather sub sector as an effort to find out how the privatization of public
enterprises may affect the financial and operational performance of these enterprises.
The data were obtained from the annual financial reports of seven firms in the stated
industry four years before and four years after privatization. Performance criteria were
calculated and compared to determine whether there are differences among them ill the
per- and post-privatization periods. The findings revealed that while privatization did not
seriously affect privatized enterprises operating performance and profitability, it led to
liquidity improvement, debt reduction, increased investments, and a decline in
over staffing.
Key words: Privatization and Efficiency
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Keywords
Privatization and Efficiency, Performance