Analysis on the Effects of Privatization toward Profitability and Efficiency of Indonesian State-Owned Enterprises

• Main Authors: , ASHARIN JUWITA PURISAMYA, , Jogiyanto Hartono M., Prof. Dr., M.B.A.,CMA
• Format: Theses and Dissertations NonPeerReviewed
• Published: [Yogyakarta] : Universitas Gadjah Mada 2013
• Subjects: ETD
• Online Access: https://repository.ugm.ac.id/124937/; http://etd.ugm.ac.id/index.php?mod=penelitian_detail&sub=PenelitianDetail&act=view&typ=html&buku_id=65101
• Institution: Universitas Gadjah Mada

In 2007, the government under Susilo Bambang Yudhoyono�s order planned to privatize a total of 38 State-Owned Enterprises (SOEs) through various methods of privatization. This plan was brought up again in the Strategic Plan of The Ministry of State-Owned Enterprises for the years 2012-2014 (Renstra 2012-2014), in which it projects that 20 SOEs are to be privatized within these three years. This plan of action yielded rather a controversy from various stakeholders in whether the privatization will bring more benefits than cost. One of many objectives of the government to conduct privatization towards SOEs is to improve the financial performance of the SOEs in terms of profitability and efficiency. Given the stated objectives, the aim of this research is to test whether these goals are in fact attained. This research compares the financial ratios such as ROA, ROE, ROS, and TATO as proxies of profitability and efficiency between pre- and post-privatization periods. This study takes samples of 17 privatized SOEs from various industries in Indonesia in years 1991-2013. The comparisons and the assessment on the significance of difference of the means are conducted using Paired-Samples t-test. The findings of this study showed that instead of an improvement, all the proxies show a declining trend upon privatization. The analysis of the findings will be outlined further in the paper.