Does the effect of government ownership affect financial performance? A survey of partially privatized firms listed at the Nairobi securities exchange

Abstract

The objective of the study was to assess the effect of government ownership/ control on financial performance of partially privatized listed companies. A sample of 16 firms with government shareholding was selected. Of these 7% were controlled by the government. The rest were considered as government investments. Secondary data was collected from the annual financial statements of the sampled companies from Capital Markets Authority and Nairobi Securities Exchange for three years 2008 to 2010. A descriptive, univariate and multivariate analysis of data was performed with the aid of SPSS version 19. Using non-parametric tests, the study found that there were no statistically significant differences between those which were controlled by the government and those that were not with respect to all the variables. The study concluded that financial performance of firms listed on the NSE is not affected by government shareholding or control since financial performance of partially privatized but listed firms is indifferent to the government control.