Using IFRS to understand the impact of the privatization on the firm’s performance: evidence from Europe

The aim of this paper is to assess the impact of privatization on the performance of privatized firms. The sample included 56 European firms over the period of 1996-2005. The methodology involved (1) comparing the ratios of privatized firms three years before and after privatization (Megginson et al., 1994) and (2) comparing the ratios of privatized firms with a sample of similar private firms three years before and after privatization (Albouy & Obeid, 2007). The ratios used in the study were consistent with the International Financial Reporting Standards. The results indicate that privatization had a positive impact on the ratios, although the effect was not statistically significant.