Privatization and productivity improvement: The case of Canadian National

This paper analyzes how privatization can influence the efficiency of a firm's operations. Canadian National (CN), a privatized firm, and its closest private sector competitor, Canadian Pacific (CP), are compared both before and after the privatization of CN. The total factor productivity of the two carriers is examined over a 17-year period (1981–1997). Accounting ratios and stock price returns are compared from 1995 to 1998. The results show that although CN was less efficient from 1981 to 1991, its performance increased to surpass that of CP during the post-privatization period.