Short-term Impact Of Privatization On Firm Performance In Ethiopia (the Case Of Leather Industry)

Privatization is a very recent experience in Ethiopia though it is a worldwide phenomenonrnill the past three decades. This study aimed at investigating the potential impact ofrnprivatization on the financial and operating performance of State Owned Enterprisesrn(SOEs) in the Leather sub sector as an effort to find out how the privatization of publicrnenterprises may affect the financial and operational performance of these enterprises.rnThe data were obtained from the annual financial reports of seven firms in the statedrnindustry four years before and four years after privatization. Performance criteria wererncalculated and compared to determine whether there are differences among them ill thernper- and post-privatization periods. The findings revealed that while privatization did notrnseriously affect privatized enterprises operating performance and profitability, it led tornliquidity improvement, debt reduction, increased investments, and a decline inrnover staffing.rnKey words: Privatization and Efficiency

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