Is the Improved Financial Performance after Broader Reforms and Privatisation Long-Lasting and Uniform Across Industries?
Yaseen Ghulam ()
Additional contact information
Yaseen Ghulam: University of Portsmouth, Portsmouth Business School, Economics and Finance Subject Group, UK
Review of Economics & Finance, 2018, vol. 13, 77-92
The long-run financial performance of industries after broad reforms, including privatisation, has rarely been investigated. This study addresses this issue and examines the financial and operational performance within the Pakistani cement industry by utilising data covering two decades of the post-reform period. The study then compares the findings against four other industries from the manufacturing sector. Our empirical estimates reveal that, similar to the findings of many early studies, privatised firms improved their profitability, capacity utilisation, liquidity, solvency and leverage indicators in the short run, but recorded either a statistically significant decline or at best no change in profitability, financial prudence and capital investment over a longer post¨Creform and privatisation period. The long-run decline in profitability was also widespread across the other comparable industries. Interestingly, the improvement in liquidity and solvency indicators for privatised firms was better than for firms that had always been private in the immediate period but only lasted briefly. The one exception is labour use efficiency in terms of sales/income per employee and real sales, which indeed significantly improved over the longer post-reform/privatisation period. However, this improvement is mostly limited to the cement industry when compared against four other industries in the Pakistani manufacturing sector.
Keywords: Financial performance; Broader reforms; Privatisation; Cement industry; Pakistan (search for similar items in EconPapers)
JEL-codes: D41 L13 L61 (search for similar items in EconPapers)
References: View references in EconPapers View complete reference list from CitEc
Citations Track citations by RSS feed
Downloads: (external link)
This item may be available elsewhere in EconPapers: Search for items with the same title.
Export reference: BibTeX
RIS (EndNote, ProCite, RefMan)
Persistent link: https://EconPapers.repec.org/RePEc:bap:journl:180307
Ordering information: This journal article can be ordered from
17 Alton Towers Circle, Unit 101 Toronto, ON, M1V3L8, Canada
Access Statistics for this article
Review of Economics & Finance is currently edited by H. Carlson
More articles in Review of Economics & Finance from Better Advances Press, Canada 17 Alton Towers Circle, Unit 101 Toronto, ON, M1V3L8, Canada.
Bibliographic data for series maintained by Carlson ().