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The Financial and Operating Performance of Privatized Companies in Turkish Cement Industry

METU Studies in Development, Vol. 32, No. 1, 59-100, 2005

43 Pages Posted: 9 Mar 2006  

Alovsat Muslumov

Dogus University

Abstract

This paper examines the post-privatization performance of privatized companies in the Turkish cement industry. The findings indicate that, when performance criteria for both the state and private enterprises are considered, privatization in the cement industry results in significant performance deterioration. Total value added and the return on investment declines significantly after privatization. This decrease mainly stems from deterioration in asset productivity. The decline in asset productivity, however, is not caused by an increase in capital investment, since postprivatization capital investment did not change significantly. Significant contraction in total employment and an increase in financial leverage after privatization are among the key research findings. Privatization through public offering, gradual privatization and domestic ownership are found to stimulate the financial and operating performance of firms following privatization.

Keywords: privatization, Turkey, cement industry, ownership structure

JEL Classification: L33

Suggested Citation

Muslumov, Alovsat, The Financial and Operating Performance of Privatized Companies in Turkish Cement Industry. METU Studies in Development, Vol. 32, No. 1, 59-100, 2005. Available at SSRN: https://ssrn.com/abstract=888667

Alovsat Muslumov (Contact Author)

Dogus University ( email )

Zeamet Sok. 21
Acibadem, Kadikoy
Istanbul, 34722
Turkey

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