This article focuses on the effect of privatization on the performance of privatized enterprises in Brazil. Our sample is the most extensive possible, including all privatized companies of the productive industry since 1991 for which financial statements were available. 15 indicators of performance were examined. Through panel data analysis it was possible to capture the effects of privatization on firm's performance, controlling for important effects such as macroeconomic fluctuation, regulation, public listing, insertion in a tradable sector, minority governmental participation in the control, and merger or split before privatization. We found an increase in profitability and operational efficiency. The loss of governmental backing causes a financial restructuring through increase in current liquidity and reduction in long term indebtedness. The effects on investment, production, and payment of dividends and taxes are unclear.
