Privatization and Financial Performance: Can Value Be Created by Privatizing State Owned Enterprises in the Middle East & North Africa (MENA) Region?

Journal of Business Valuation and Economic Loss Analysis, Berkeley Electronic Press, Vol. 3, No. 1, 2008

22 Pages Posted: 25 Sep 2008 Last revised: 8 Jan 2013

See all articles by David Dawley

David Dawley

West Virginia University

Jamal Ibrahim Haidar

Harvard University

Date Written: January 18, 2008

Abstract

This study investigates the impact of privatization on value creation in State Owned Enterprises (SOEs) in the Middle East and North Africa (MENA) region. A multi-case study approach, using quantitative and qualitative data, is used to rectify the findings of prior SOE privatization research by taking a finer-grained analysis into the conditions that determine post-privatization performance. This study addresses the research question, "What is the effect of privatization in terms of value creation for State Owned Enterprises in the Middle East and North Africa (MENA) region?" Value creation is measured in terms of profitability, operating efficiency, capital expenditures, and leverage. Using quantitative performance metrics to assess value creation, we also use qualitative data to show that post-privatization value creation depends on specific strategic initiatives as well as government policy toward competition. Our overall conclusion is that privatizing SOEs can be beneficial in the MENA region but must coincide with strong government reform policies, and certain financial and managerial strategies.

Keywords: MENA, Privatization, SOE, Restructuring, and Value Creation

Suggested Citation

Dawley, David and Haidar, Jamal Ibrahim, Privatization and Financial Performance: Can Value Be Created by Privatizing State Owned Enterprises in the Middle East & North Africa (MENA) Region? (January 18, 2008). Journal of Business Valuation and Economic Loss Analysis, Berkeley Electronic Press, Vol. 3, No. 1, 2008, Available at SSRN: https://ssrn.com/abstract=1234442

David Dawley

West Virginia University ( email )

PO Box 6025
Morgantown, WV 26506
United States

Jamal Ibrahim Haidar (Contact Author)

Harvard University ( email )

1875 Cambridge Street
Cambridge, MA 02138
United States

HOME PAGE: http://scholar.harvard.edu/haidar

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