The Effects of Changes in Corporate Governance and Restructurings on Operating Performance: Evidence from Privatizations

42 Pages Posted: 25 May 2006

See all articles by Juliet D'Souza

Juliet D'Souza

Clayton State University - Department of Finance & Economics

Robert C. Nash

Wake Forest University

William L. Megginson

University of Oklahoma

Date Written: May 24, 2006

Abstract

Using a sample of 161 firms (privatized from 1961-1999), our study offers evidence regarding how restructurings and corporate governance changes affect the firm's post-privatization performance. Prior to privatization, governments may choose to restructure firms through governance changes (i.e., establish relation with strategic foreign investors, implement employee share ownership plans) and/or restructurings (i.e., acquisitions, divestitures, re-capitalizations). We first extend the existing privatization research by documenting and describing these restructurings. We then conduct preliminary tests to examine whether such restructurings/governance changes have contributed to improvements in post-privatization operating performance. Our results suggest that both restructuring and changes in corporate governance are important determinants of post-privatization performance. We feel that our multi-national, multi-industry sample provides a broad perspective of share-issue privatizations and offers opportunities to identify potential sources of efficiency improvements in newly privatized firms.

Keywords: International financial markets, performance, privatization

JEL Classification: G15, G28, G38, L33

Suggested Citation

D'Souza, Juliet and Nash, Robert C. and Megginson, William L., The Effects of Changes in Corporate Governance and Restructurings on Operating Performance: Evidence from Privatizations (May 24, 2006). Available at SSRN: https://ssrn.com/abstract=904284 or http://dx.doi.org/10.2139/ssrn.904284

Juliet D'Souza

Clayton State University - Department of Finance & Economics ( email )

5900 North Lee Street
Morrow, GA 30260
United States
770-961-3410 (Phone)

Robert C. Nash

Wake Forest University ( email )

2601 Wake Forest Road
Winston-Salem, NC 27109
United States

William L. Megginson (Contact Author)

University of Oklahoma ( email )

307 W Brooks, 205A Adams Hall
Norman, OK 73019
United States
(405) 325-2058 (Phone)
(405) 325-1957 (Fax)

HOME PAGE: http://faculty-staff.ou.edu/M/William.L.Megginson-

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