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Privatization Performance in Turkey

Esra Kabaklarlı

This book examines the financial performance of Turkish firms that were privatized by way of IPOs (Initial Public Offerings). The author uses event study methodology to empirically evaluate the financial efficiency of privatized firms. She also compares the equity returns of state firms to the returns of private sector firms that were listed in the same period or in the same sector. The pre-and-post privatization performance is tested using the Wilcoxon signed-rank test involving accounting data and financial ratios of the privatized firms. Empirical findings of post privatization analysis indicate improvements in firm performance in regard to real sales, leverage and capital expenditures.

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This thesis examines the financial performance of Turkish firms (Türk Hava Yolları, Türkiye Halk Bankası, Türkiye İş Bankası, Migros, Konya Çimento Tofaş Erdemir, Petrol Ofisi, Tüpraş, Petkim) that were privatized by way of IPOs (Initial Public Offerings). The Event Study methodology is used to evaluate empirically the financial efficiency of privatized firms. Also we compared the equity returns of state firms to the returns of private sector firms that were listed in the same period or in the same sector. When we looked at the empirical studies on the post-privatization performance, we decided that the best method for comparing state firms’ abnormal returns to private firms’ is the “Event Study”, used by Dockner (2005), Tatahi and Heshmati (2009). The same hypotheses are implemented. This study is an effort to help fill a research gap. As the statistics of abnormal returns depending on the calculation of average and cumulative returns exceed the threshold value, we conclude that investors reacted positively to privatization of state firms through IPOs.The abnormal returns took place in the stock market after privatization. It is found that the cumulative returns of private firms are significantly below those of privatized firms. ←5 | 6→ ←6 | 7→

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