The effect of privatisation on financial performance of firms in Kenya
The aim of this study was to investigate the effect of privatisation on financial and operat ional efficiency of firms in Kenya . The data for the study was obtained from se condary sources; specifically, hand b ook from the Nairobi Securities Exchange , Offer Prospectuses, as well as published annual reports and financial statements of the privatized firms five years before and five years after privatization. To test our predictions, we followed the techniques of Megginson et al. (1994) in order to determine post privatization performance changes. We calculated the mean value of each variable for each firm over the pre and post privatization periods, we then used the T - test and the Wilcoxon sign rank test as principal methods of testing for significant changes in the variables. Results obtained from this study were mixed. Whereas some companies showed improvements in some indicators, other companies have shown decline in some indicators after privatization. However, in spite the mixed results, the overall picture sho wed improvement in performance for the listed firms and no improvements for non - listed firms in o ur sample .