Post - Privatization Performance of Jordanian Firms in Terms of Ownership Structure and Sector

Abstract

The main objective of the study is to examine whether post-privatization performance changes differ according to the new ownership structure that formed after privatization. Also, the study aims at determining whether firm's performance changes during post-privatization period differ according to the sector. The empirical analysis of the study is based on a all privatized Jordanian listed companies in both industrial and service sectors during the period 1995-2006. Results of the study show that there is significant increase in operating efficiency after privatization; also, there is significant decrease in liquidity after privatization. The result of Mann Whitney test shows that there is a significant difference in post-privatization performance changes attributed to the new ownership structure. The study also shows that operating efficiency tend to be increased significantly after privatization for both service and industrial firms. Capital expenditures on the other hand, decreased significantly after privatization for industrial firms, and increased insignificantly for service firms by 6.7%. Moreover, employment level decreased for both sectors at different levels, industrial firms document statistically significant decrease in employment, while service firms document insignificant decrease in employment.