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PRIVATISING NATIONAL OIL COMPANIES: ASSESSING THE IMPACT ON FIRM PERFORMANCE - page 24 / 30

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individual SIP forward or back in time impacts, ceteris paribus, on firm performance.

But the magnitude of such changes is very much limited for most metrics and only of

a temporary nature as the performance trajectories eventually re-converge. In terms of

the structuring of the privatisation process, there seems to be no single recipe for

success – the details of the privatisation process matter rather less, as long as a

credible commitment in support of privatisation is given and sustained over time. In

such cases full privatisation is not necessary to reap the benefits associated with

private capital markets, partial privatisation can yield substantial parts of them

without the home government having to cede majority control. Based on this dataset,

whilst a partial reversal of the initial performance improvements is possible in

intermitting years, over the full privatisation cycle these improvements are

perpetuated and often extended. An important caveat for the judgement on

performance improvements, however, is the absence of reliable conclusions about

production costs.

VI. Discussion

Economic studies of privatisation are often subject to methodological critique and

some technical limitations, which we have attempted to address, or at least contain,

within this study. We primarily aim to investigate the operational and financial

performance of newly privatised firms, which does not necessarily equate to

economic efficiency or welfare. However, the wide range of 22 different performance

metrics was specifically chosen to reach beyond the narrow profit motive of the

private firm and to also include indicators of operating efficiency. A frequent

criticism of privatisation studies is that publicly and privately owned companies

cannot be meaningfully compared on the basis of commercial performance – and

profitability in particular – because of their inherently different objective functions

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