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Periodical article Periodical article Leiden University catalogue Leiden University catalogue WorldCat catalogue WorldCat
Title:Privatization and Technical Efficiency: Evidence from the Manufacturing Sector in Malawi
Author:Chirwa, Ephraim W.
Periodical:African Development Review
Geographic term:Malawi
Development and Technology
Economics and Trade
Abstract:The government of Malawi has implemented privatization programmes within the framework of structural adjustment programmes (SAP) imposed by the World Bank and IMF following the poor performance of State enterprises in the early 1980s. This study evaluates the impact of privatization on the technical efficiency of six privatized enterprises, three State-owned enterprises and six private enterprises competing in three oligopolistic manufacturing industries in which privatization took place between 1984 and 1991. The study uses panel data from 1970-1997. Technical efficiency scores are computed using Data Envelopment Analysis (DEA) based on the 'intertemporal frontier' approach for panel data. The results show that privatization in Malawi is associated with high mean technical efficiency in privatized enterprises and competing State-owned enterprises and private enterprises. When accounting for other sources of technical efficiency, evidence is found in the full sample that the competitive process is more important than privatization in increasing the technical efficiency of all enterprises competing in the same industries. However, the results of the subsample of privatized enterprises show that privatization significantly increases the technical efficiency of privatized enterprises. Bibliogr., notes, ref., sum. in English and French.