Much debate has been generated about whether privatization tends to enhance ®rm ®nancial performance. The research presented here seeks to identify the strategic choices that dierentiated ®rms with superior post-privatization performance from those with inferior post-privatization performance.Using agency theory as a theoretical foundation, it is hypothesized that superior post-privatization ®rm performance will be associated with (1) the government not retaining a signi®cant stock holding, (2) changes in leadership, (3) management stock options being initiated, (4) employee head count being reduced, and (5) the company being restructured ®nancially. The sample draws from 41 privatized ®rms from six industry classi®cations and 15 countries. To accommodate comparisons of small subsamples, non-parametric statistical methods are used. Controlling for size, industry and country (economic/regulatory eects), the hypotheses are generally supported except for the one relating to headcount.
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