The Impact of Stock Exchange Performance of Selected French Privatization Firms

The impact of privatization on the operational performance of privatized firms is a subject that has been of great interest in recent finance literature. Most of the existing works on this area use conventional variables and compute financial ratios of profitability, productivity, investment, debt and employment in analysing data for financial management. This paper however attempts to determine the effects of privatization on the stock performance of privatized firms, and adopts a comparative approach between stock exchange performance of the privatized firms and the private firms’ benchmarks, using data from the period of 1986 to 2005. It is observed from such an approach that the privatized firms have a remarkably higher performance compared to the private firms.