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The IUP Journal of Applied Finance
The Effects of Tunisian Privatization on Stock Market Dynamics During the Period 1995-2001
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The aim of this paper is to explain why an efficient privatization policy should transit through stock markets. Indeed, in theory, this method can be considered as the best for several reasons: more justice, more equity, more transparency. Also, this modality has showed its ability to imply the majority of socioeconomic groups around, one of the less popular policies especially in the less developed countries. The analyses of the Tunisian case showed that restructuring of public companies (through the stock market) had created a dynamic in the financial market size, improved market performance, and an increase in the number of savers-investors.

 
 
 

By the turn of the 1990s, privatization of Public Enterprises (PEs) manifested itself economically as an irreversible solution to the poor performance of the public sector which characterized and dominated the 1980s. Although this has started since the second half of the 1970s, three new factors have given it a new dimension and more importantly a new impetus in the late 1980s (Larrain and Winograd, 1996).

Firstly, the state regulation in the former socialist economies revealed its limitations and inabilities to ensure the various macroeconomic balances that have continued to deteriorate. Therefore, failure of centralized planning based on a generalized public ownership of means of production required a transition to a market economy through the abolition of the public sector and through a massive privatization movement.

 
 
 

Applied Finance Journal, Tunisian, Privatization, Stock Market, Dynamics, Import Substitution Industrialization (ISI), Public Enterprises (PEs), Period 1995-2001.