Privatization in Turkey and performance analysis of the privatized companies in cement industry

Abstract

Privatization is any transaction that reduces a government’s ownership in or control over a public enterprise or results in the liquidation and sale of assets of a public enterprise. Turkish experiment of privatization attracted researchers’ attention because of being an interesting case with an interactive triangle: relationship among the state, the society, and the international system. State Owned Enterprises were founded because of the desire of the Turkish Government to produce in the sectors where private sector was not producing. However, the f)erformance of state owned enterprises deteriorated over time. Privatizing the ones with poor performances seemed to be the best solution. Turkish Government had made a strong commitment to privatization after a new government established in 1983. However, no progress worth to mention about had been made until 1989. Privatization efforts have gained momentum afterwards. This study examines the performance of the privatization in cement industry by Wilcoxon rank tests and t-test by comparing the pre- and post-privatization performances according to several characteristics (such as profitability, operating efficiency, output, employment, leverage). According to the test results, privatized cement companies have no significant improvement after privatization in terms of performance measures other than sales efficiency.