Two decades after privatization: an evaluation of efficiency and the qualitative changes of Pakistani cement industry

This study evaluates the long run impact of the combination of broader reforms before and after a change of ownerships on the operational performance of Pakistani cement industry. The empirical estimates of cost efficiency reveal that firms have been successful in their cost minimization efforts over longer time periods, as a result of qualitative and quantitative adjustments in firms’ operational practices and market conditions. However, catching of best practice firm(s) in output maximization subject to given input use measured by the technical efficiency of the industry has not been achieved in the long run. Further, the study investigates firms’ behavioral preference in cost minimization and conclude that this choice, alongside reforms, could be partially explained by the combination of operational changes, such as effective human resource management and modernization of production process resulting in higher operational days and better capacity utilization.