Pre- and Post-privatization Performance of Soes: An Empirical Analysis

The main motive of this book is to assess the impacts of privatization in Pakistan, compared to exploratory, the empirical analysis is a more scientific and comprehensive way to examine the evaluation of privatized SOEs. Chapter 5 conducts a thorough empirical analysis of the privatized SOEs by involving difference-in-difference approach. Setting up the before and after outcomes, we analyze the impact of privatization on firm performance, and efficiency, and highlight the sector-specific outcomes. The findings reveal mixed results: while some privatized firms show some improvement in performance and efficiency compared to their pre-privatization state, while overall it is not significant. However, there is a notable improvement in the efficiency of privatized firms in terms of return on assets (ROA). Sector-specific analysis uncovers varied impacts of privatization, with some sectors experiencing positive effects while others remain relatively unchanged. The chapter underscores the importance of an enabling regulatory environment to support successful privatization efforts, emphasizing the need for effective regulation to ensure the efficient operation of privatized entities within a competitive market framework.