Evaluation of The privatization Policy Perfprmance Through Financial Indices of Transferred Enterprises

Subject Areas : Futurology

Akbar Komijani ¹ (ندارد)
Mehri Rahimifar ² (ندارد)

Received: 2015-05-26 Accepted : 2015-05-26 Published : 1998-03-21

Keywords:

Abstract :

Due to the inefficiency emerging from the public owned enterprises activities, privatization was implemented as an instrument to improve the economic performance of the public enterprises in Iran. The policies designed in the first five year plan and its 32 note have been considered as first legal, lawful, policy orientation guidances to examine the financial and operational profile of the public enterprises in order to rank them for privatization purposes. An initial survey on the process of undertaken steps indicates that the main goals of privatization have neglected or undershadowed by considering the secondary objectives. During the years of the privatization policy implementation, some organizations such as the Iran National Industries Organization, Iran Development and Renovation Industries Organization, and Mining and Industrial Bank have succeeded to supply the equities of their offiliated companies, even though in some cases due to the low presentation of equities, there has been some obstacles for the fully transfer of ownership or management of the public enterprises to the private sector. This article focuses on the microeconomic performance of the transferred companies with great emphasis on different ways of privatization: including stock exchane, auction and negotiations, the organization in charge of privatization and the amount of transferred shares. It is noteworthy that our sample includes public enterprises sold with more than 50 percent in the form of equities or wholly transferred to the private sector. In this approach, some attempts have been made to analyze the privatization performance by implementing financial/ operational indices including profit to sale ratio, per capita sale, per capital profit, the capacity utilization ratio and comparative analysis of them during the pre and post privatization years. Also, the process is evaluated by measuring the overall efficiency improvement, management enhancement and effective participation of the private sector in economic activities. The methodology used in this article is to choose a sample among the transferred enterprises and evaluate their performances during the post privatization years by the above mentioned indices. In short, the results imply that profitability indices in most transferred enterprises enjoyed an increasing trend during the post privatization years, mainly due to the overall price increase, amongst other sources. Also, the employment rate in most transferred companies through auction and negotiation has increased rapidly. In addition profit to sale ratio in all alternatives methods of transfer experienced an upward trend during the post privatization years.