Abstract:
There are many studies for developed and developing countries but none of these studies
has extensively covered the privatization program from structural and contextual issue of
accounting standpoint in Pakistan. The core part of this study is to test the hypothesis that
privatization in Pakistan has increased the profitability, operating performance, capital
investment spending, higher dividend payments and output of the firms but lower
leverage ratios and employment of firms after divestiture.
This dissertation aims to examine and evaluate the financial and operating performance
of only those firms, which were privatized during years discussed in this study. The
closed down units have also been discussed for their negative impact on economy.
The sample consists of 33 companies from 8 sectors. In overall analysis we documented
significant increases in financial, automobile, cement, energy, fertilizer, engineering
sectors’ post privatization performance but ghee and chemical sectors did not perform
well in almost all proxies.
In sector-wise analysis the results are almost similar in financial, automobile and cement
sectors. Empirical evidences show that profitability, efficiency, investment, employment
and dividend increases after privatization. While output and employment decrease in
financial, increase in automobile and cement sector.
