Ownership as a determining factor in the evolution of efficiency

Journal of Information Engineering and Applications, 2011

This paper examined the technical efficiency of Libyan manufacturing firms over the 2000 to 2008 time period. The study used the Data Envelopment Analysis (DEA) technique to analyze production efficiency of firms before and after privatization. An inefficiency model is estimated to link the inefficiency of inputs or resources used to produce output to other factors such as ownership structure to justify the impact of privatization policy on efficiency. The results indicated that the average efficiency score before privatization was 49.5 percent, but the score improved to 62.3 percent after privatization. The increase of 12.8 percent indicates that on average there is only minor improvement in technical efficiency of firms after privatization. Nevertheless, this increase was not statistically significant. The results also indicated that there were no evidences to suggest that there are differences in efficiency levels of firms before and after privatization policy, and efficiency is a function of ownership structure.

SSRN Electronic Journal, 2000

This paper provides an evaluation of the effects of privatisation on the efficiency of firms in the case of large Spanish State-Owned Enterprises that had been privatised from 1990 onward. The firms' efficiency is approached here by financialperformance indicators, through acknowledging, on the one hand, their shortcomings and, on the other, the advantage of their direct comprehensibility. Unlike other research work that compares pre-post privatisation performance, we 1) make use here of usual economic-performance indicators, though taking into account their hierarchical relationship; 2) take as privatisation moment the point at which control over the firm actually passes from the government to private investors; and 3) work on companies' base data, and exclude all extraordinary and non-operating financial flows.

SSRN Electronic Journal, 2002

The massive interests of economic literature about the privatisation gave a notable impulse to the discussion about this theme in the pre and post privatisation firms performance. Basically in every case after privatisation the level of profit increases. Does this mean that privatisation is certainly able to increase efficiency? In this field a large part of the literature leave out the complex problem that public firms usually are subject to objectives and constraints that differently from private firms can affect the overall economic efficiency. Unfortunately many authors ignore the effects of taxation during the process of privatisation, but in real term there are significant tax issues that must be considered by public and private decision maker. In this paper we concentrate the attention on the efficiency measures with the purpose to identify and measure sources of successful performance that can be used in policy planning and allocation of resources. Several techniques to calculate these frontier functions have been used, some of them parametric, others non-parametric to empirically investigate the relationship between taxation on firm's income and efficiency in the period pre and post-privatisation. In this work we use both econometric and mathematical programming approaches for measuring efficiency. The econometric tool provide maximum likelihood estimates of a stochastic production and cost functions to distinguish noise from inefficiency. Instead, the mathematical programming approaches are nonstochastic and they do not make strict assumptions on the functional form of production and the statistical properties of the data. The general results obtained from the 3 different tools (Stochastic Frontier, Data Envelopment Analysis and Neural Network) are consistent. In fact, we see that privatization enhanced efficiency in three out of four sample firms.

International Journal of Research in Social Science and Humanities, 2024

This study focused on assessing the impact of privatization on the technical efficiency of Nigeria's manufacturing sector, considering the unique economic, political, and organizational characteristics of Nigeria whether privatized firms perform better under private ownership compared to public ownership. The methodology employed for this assessment was Data Envelopment Analysis (DEA), specifically utilizing the Output-Oriented Variable Returns to Scale (VRS) model. The selection of this model was influenced by its appropriateness for situations where manufacturing firms are undergoing substantial structural changes, such as privatization. The findings suggest an overall positive impact of privatization on technical efficiency, with enhanced performance and resource utilization among privatized firms. The study emphasizes the need for tailored policies and a deep understanding of local conditions when pursuing privatization initiatives, contributing to the international discourse on privatization's implications for economic development and efficiency. The study recommended that given the improved output technical efficiency post-privatization, reducing the size of public enterprises and entrusting them to private management is advisable. This aims to enhance output efficiency, minimize economic resource wastage, alleviate financial burdens on the public sector treasury, and encourage fiscal discipline while removing the constraints hindering profit maximization, the Nigeria government should fight double taxation and unreliable power supply, to encourage industrialization to speed up development in Nigeria. In conclusion, Ultimately, the study aims to inform the Nigerian government's decision-making regarding privatization strategies and their potential impact on the country's manufacturing sector and overall economic well-being.

Annals of Public and Cooperative Economics, 1992

2016

There has been still a debate about the efficacy of privatization for economic transformation of countries. Nonetheless, many developing countries including Ethiopia have privatized public owned enterprises as a manifestation of their commitment to implement the reform packages induced by multilateral institutions through the Structural Adjustment Program. The proponents for pro-privatization strongly argue that private enterprises operate more efficiently than those that are owned by the state. The main objective of this paper is, therefore, to assess the extent to which privatized industries operate more efficiently as compared to those that remain under the public domain and other private industries. A Cobb-Douglass stochastic frontier production function is estimated for the group and separately for privatized industries. The econometric result revealed that the average technical efficiency for the whole sample was about 73.4% during the period 1998/992001/02. Privatized industr...

This paper examined the technical efficiency of Libyan manufacturing firms over the 2000 to 2008 time period. The study used the Data Envelopment Analysis (DEA) technique to analyze production efficiency of firms before and after privatization. An inefficiency model is estimated to link the inefficiency of inputs or resources used to produce output to other factors such as ownership structure to justify the impact of privatization policy on efficiency. The results indicated that the average efficiency score before privatization was 49.5 percent, but the score improved to 62.3 percent after privatization. The increase of 12.8 percent indicates that on average there is only minor improvement in technical efficiency of firms after privatization. Nevertheless, this increase was not statistically significant. The results also indicated that there were no evidences to suggest that there are differences in efficiency levels of firms before and after privatization policy, and efficiency is a function of ownership structure.

This paper examined the technical efficiency of Libyan manufacturing firms over the 2000 to 2008 time period. The study used the Data Envelopment Analysis (DEA) technique to analyze production efficiency of firms before and after privatization. An inefficiency model is estimated to link the inefficiency of inputs or resources used to produce output to other factors such as ownership structure to justify the impact of privatization policy on efficiency. The results indicated that the average efficiency score before privatization was 49.5 percent, but the score improved to 62.3 percent after privatization. The increase of 12.8 percent indicates that on average there is only minor improvement in technical efficiency of firms after privatization. Nevertheless, this increase was not statistically significant. The results also indicated that there were no evidences to suggest that there are differences in efficiency levels of firms before and after privatization policy, and efficiency is a function of ownership structure.

Annals of Public and Cooperative …, 1992

Annals of Public and Cooperative Economics, 1993