The effect of privatization on financial performance of state owned enterprises (A Case Study of Formerly State-owned Enterprises Listed at Nairobi Stock Exchange)
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Date
2013-08-27
Authors
Muthini, Leonard Musomba
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Abstract
The analysis of the impact of privatization on financial performance of privatized
enterprises in Kenya is important since there are high expectations placed upon
privatization, by policy makers and the public at large, to improve enterprise performance
and achieve macroeconomic stabilization. In view of this the main purpose of this study
was to illustrate, using empirical evidence, the extent to which the privatization programs
adopted by Government of Kenya had an impact on the financial performance of
privatized enterprises as was anticipated by the policy makers. The main aim of the study
was to establish the effect of privatization on financial performance of state owned
enterprises. To answer the question the paper considers a large set of privatized
enterprises in different sectors which experienced privatization over the period from three
years. The specific objectives of the study were; to establish the effect of privatization on
profitability of privatized state-owned enterprises in Kenya, to determine the effect of
privatization on liquidity of privatized state-owned enterprises in Kenya and to determine
the effect of privatization on working capital of privatized state-owned enterprises in
Kenya. The study took the six former state owned enterprises already listed in Nairobi
Stock Market. The study used the financial reports of the firms before and after
privatization as the secondary data to address these objectives. The key variables of the
study were the firms' profitability, liquidity and working capital. The study established
that privatization generally improved the firms' profitability, liquidity and working
capital which are the main indicators of financial performance.
The analysis of the impact of privatization on financial performance of privatized
enterprises in Kenya is important since there are high expectations placed upon
privatization, by policy makers and the public at large, to improve enterprise performance
and achieve macroeconomic stabilization. In view of this the main purpose of this study
was to illustrate, using empirical evidence, the extent to which the privatization programs
adopted by Government of Kenya had an impact on the financial performance of
privatized enterprises as was anticipated by the policy makers. The main aim of the study
was to establish the effect of privatization on financial performance of state owned
enterprises. To answer the question the paper considers a large set of privatized
enterprises in different sectors which experienced privatization over the period from three
years. The specific objectives of the study were; to establish the effect of privatization on
profitability of privatized state-owned enterprises in Kenya, to determine the effect of
privatization on liquidity of privatized state-owned enterprises in Kenya and to determine
the effect of privatization on working capital of privatized state-owned enterprises in
Kenya. The study took the six former state owned enterprises already listed in Nairobi
Stock Market. The study used the financial reports of the firms before and after
privatization as the secondary data to address these objectives. The key variables of the
study were the firms' profitability, liquidity and working capital. The study established
that privatization generally improved the firms' profitability, liquidity and working
capital which are the main indicators of financial performance.
The analysis of the impact of privatization on financial performance of privatized
enterprises in Kenya is important since there are high expectations placed upon
privatization, by policy makers and the public at large, to improve enterprise performance
and achieve macroeconomic stabilization. In view of this the main purpose of this study
was to illustrate, using empirical evidence, the extent to which the privatization programs
adopted by Government of Kenya had an impact on the financial performance of
privatized enterprises as was anticipated by the policy makers. The main aim of the study
was to establish the effect of privatization on financial performance of state owned
enterprises. To answer the question the paper considers a large set of privatized
enterprises in different sectors which experienced privatization over the period from three
years. The specific objectives of the study were; to establish the effect of privatization on
profitability of privatized state-owned enterprises in Kenya, to determine the effect of
privatization on liquidity of privatized state-owned enterprises in Kenya and to determine
the effect of privatization on working capital of privatized state-owned enterprises in
Kenya. The study took the six former state owned enterprises already listed in Nairobi
Stock Market. The study used the financial reports of the firms before and after
privatization as the secondary data to address these objectives. The key variables of the
study were the firms' profitability, liquidity and working capital. The study established
that privatization generally improved the firms' profitability, liquidity and working
capital which are the main indicators of financial performance.
Description
Department of Business Administration, 62p. 2012 HD 4346.5 .M8
Keywords
Muthini, Leonard Musomba