Advanced Search
MyIDEAS: Login to save this article or follow this journal

State ownership and control in the Czech Republic

Contents:

Author Info

  • Evžen Kočenda

    ()

  • Jan Hanousek

    ()

Abstract

We analyze the extent of the integrated control of the state over privatized firms during the post-privatization decade (1995–2005) in the Czech Republic. During this period the integrated control potential of the state resembled a corporate pyramid. While pyramidal control was not fully utilized, the golden share in the hands of the state substantially enhanced its ability to control firms. In terms of corporate performance we show that state control resulted in declining and even negative corporate performance. Integrated state control was shown to be mostly inferior when compared with private types of ownership. State ownership positions are in striking contrast with the lack of capacity to push corporate performance in order to collect larger tax volumes. Lack of focus and inter-agency cooperation as well as the simple inefficiency of the state bureaucracy are the most likely reasons behind our findings. Copyright Springer Science+Business Media, LLC. 2012

Download Info

If you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.
File URL: http://hdl.handle.net/10.1007/s10644-011-9114-z
Download Restriction: Access to full text is restricted to subscribers.

As the access to this document is restricted, you may want to look for a different version under "Related research" (further below) or search for a different version of it.

Bibliographic Info

Article provided by Springer in its journal Economic Change and Restructuring.

Volume (Year): 45 (2012)
Issue (Month): 3 (August)
Pages: 157-191

as in new window
Handle: RePEc:kap:ecopln:v:45:y:2012:i:3:p:157-191

Contact details of provider:
Web page: http://www.springerlink.com/link.asp?id=113294

Related research

Keywords: Corporate pyramid; State ownership; Privatization; Corporate performance; Voting rights; Golden share; C51; D23; D24; L23; P26;

Other versions of this item:

Find related papers by JEL classification:

References

References listed on IDEAS
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
as in new window
  1. Oliver Hart & Andrei Shleifer & Robert W. Vishny, 1996. "The Proper Scope of Government: Theory and an Application to Prisons," NBER Working Papers 5744, National Bureau of Economic Research, Inc.
  2. Randall K. Morck & David A. Strangeland & Bernard Yeung, 1998. "Inherited Wealth, Corporate Control and Economic Growth," William Davidson Institute Working Papers Series 209, William Davidson Institute at the University of Michigan.
  3. Raj Aggarwal & Joel T. Harper, 2000. "Equity Valuation in the Czech Voucher Privatization Auctions," Financial Management, Financial Management Association, vol. 29(4), Winter.
  4. Ariane Chapelle & Ariane Szafarz, 2005. "Controlling firms through the majority voting rule," ULB Institutional Repository 2013/149192, ULB -- Universite Libre de Bruxelles.
  5. Rafael La Porta & Florencio Lopez-de-Silane & Andrei Shleifer, 1998. "Corporate Ownership Around the World," NBER Working Papers 6625, National Bureau of Economic Research, Inc.
  6. Bai, Chong-En & Lu, Jiangyong & Tao, Zhigang, 2009. "How does privatization work in China?," Journal of Comparative Economics, Elsevier, vol. 37(3), pages 453-470, September.
  7. Cull, Robert & Matesova, Jana & Shirley, Mary, 2002. "Ownership and the Temptation to Loot: Evidence from Privatized Firms in the Czech Republic," Journal of Comparative Economics, Elsevier, vol. 30(1), pages 1-24, March.
  8. Bernardo Bortolotti & Mara Faccio, 2004. "Reluctant Privatization," Working Papers 2004.130, Fondazione Eni Enrico Mattei.
  9. Randall Morck & Bernard Yeung, 2003. "Family Control and the Rent-Seeking Society," William Davidson Institute Working Papers Series 585, William Davidson Institute at the University of Michigan.
  10. Rajeev H. Dehejia & Sadek Wahba, 1998. "Propensity Score Matching Methods for Non-experimental Causal Studies," NBER Working Papers 6829, National Bureau of Economic Research, Inc.
  11. Joel Hellman & Mark Schankerman, 2000. "Intervention, corruption and capture: the nexus between enterprises and the state," Working Papers 58, European Bank for Reconstruction and Development, Office of the Chief Economist.
  12. Maug, Ernst, 1996. "Corporate control and the market for managerial labour: On the decision to go public," European Economic Review, Elsevier, vol. 40(3-5), pages 1049-1056, April.
  13. Orlowski, Lucjan T., 2008. "Relative inflation-forecast as monetary policy target for convergence to the euro," Journal of Policy Modeling, Elsevier, vol. 30(6), pages 1061-1081.
  14. Ariane Chapelle & Ariane Szafarz, 2007. "Control consolidation with a threshold: An algorithm," ULB Institutional Repository 2013/6065, ULB -- Universite Libre de Bruxelles.
  15. Jan Hanousek & Evžen Kočenda, 2008. "Potential of the state to control privatized firms," Economic Change and Restructuring, Springer, vol. 41(2), pages 167-186, June.
  16. John Bennett & Saul Estrin & James Maw, 2005. "Why did Transition Economies Choose Mass Privatization?," Journal of the European Economic Association, MIT Press, vol. 3(2-3), pages 567-575, 04/05.
  17. Heitor V. Almeida & Daniel Wolfenzon, 2006. "A Theory of Pyramidal Ownership and Family Business Groups," Journal of Finance, American Finance Association, vol. 61(6), pages 2637-2680, December.
  18. Lizal, Lubomir & Kocenda, Evzen, 2001. "State of corruption in transition: case of the Czech Republic," Emerging Markets Review, Elsevier, vol. 2(2), pages 138-160, June.
  19. Evžen Kočenda, 1999. "Residual State Property in the Czech Republic," Eastern European Economics, M.E. Sharpe, Inc., vol. 37(5), pages 6-35, October.
  20. Bernardo Bortolotti & Mara Faccio, 2009. "Government Control of Privatized Firms," Review of Financial Studies, Society for Financial Studies, vol. 22(8), pages 2907-2939, August.
  21. Guy S. Liu & Pei Sun, 2005. "The Class of Shareholdings and its Impacts on Corporate Performance: a case of state shareholding composition in Chinese public corporations," Corporate Governance: An International Review, Wiley Blackwell, vol. 13(1), pages 46-59, 01.
  22. Shleifer, Andrei & Vishny, Robert W, 1994. "Politicians and Firms," The Quarterly Journal of Economics, MIT Press, vol. 109(4), pages 995-1025, November.
  23. Ranko Jelic & Richard Briston & Wolfgang Aussenegg, 2003. "The Choice of Privatization Method and the Financial Performance of Newly Privatized Firms in Transition Economies," Journal of Business Finance & Accounting, Wiley Blackwell, vol. 30, pages 905-940.
  24. Jeffrey Smith & Petra Todd, 2003. "Does Matching Overcome Lalonde's Critique of Nonexperimental Estimators?," University of Western Ontario, CIBC Centre for Human Capital and Productivity Working Papers 20035, University of Western Ontario, CIBC Centre for Human Capital and Productivity.
  25. Tarun Khanna & Yishay Yafeh, 2007. "Business Groups in Emerging Markets: Paragons or Parasites?," Journal of Economic Literature, American Economic Association, vol. 45(2), pages 331-372, June.
  26. Irena Grosfeld & Thierry Tressel, 2002. "Competition and ownership structure: Substitutes or complements? Evidence from the Warsaw Stock Exchange," The Economics of Transition, The European Bank for Reconstruction and Development, vol. 10(3), pages 525-551, November.
  27. Daphne Yiu & Yuan Lu, 2005. "Understanding Business Group Performance in an Emerging Economy: Acquiring Resources and Capabilities in Order to Prosper," Journal of Management Studies, Wiley Blackwell, vol. 42(1), pages 183-206, 01.
  28. Kothari, S.P. & Leone, Andrew J. & Wasley, Charles E., 2005. "Performance matched discretionary accrual measures," Journal of Accounting and Economics, Elsevier, vol. 39(1), pages 163-197, February.
  29. Saul Estrin & Jan Hanousek & Evzen Kocenda & Jan Svejnar, 2009. "The Effects of Privatization and Ownership in Transition Economies," Journal of Economic Literature, American Economic Association, vol. 47(3), pages 699-728, September.
  30. Jan Hanousek & Evzen Kocenda & Jan Svejnar, 2009. "Divestitures, privatization and corporate performance in emerging markets," The Economics of Transition, The European Bank for Reconstruction and Development, vol. 17(1), pages 43-73, 01.
  31. Xufei Ma & Xiaotao Yao & Youmin Xi, 2006. "Business group affiliation and firm performance in a transition economy: A focus on ownership voids," Asia Pacific Journal of Management, Springer, vol. 23(4), pages 467-483, December.
  32. Randall Morck, 2009. "The Riddle of the Great Pyramids," NBER Working Papers 14858, National Bureau of Economic Research, Inc.
  33. Yingyi Qian, 1996. "Enterprise reform in China: agency problems and political control," The Economics of Transition, The European Bank for Reconstruction and Development, vol. 4(2), pages 427-447, October.
  34. Joel Hellman & Mark Schankerman, 2000. "Intervention, Corruption and Capture: The Nexus between Enterprises and the State," The Economics of Transition, The European Bank for Reconstruction and Development, vol. 8(3), pages 545-576, November.
  35. Hellman, Joel S. & Jones, Geraint & Kaufmann, Daniel, 2003. "Seize the state, seize the day: state capture and influence in transition economies," Journal of Comparative Economics, Elsevier, vol. 31(4), pages 751-773, December.
  36. Jan Hanousek & Eugene Kroch, 1998. "The two waves of voucher privatization in the Czech Republic: a model of learning in sequential bidding," Applied Economics, Taylor & Francis Journals, vol. 30(1), pages 133-143.
  37. Faccio, Mara & Lang, Larry H. P., 2002. "The ultimate ownership of Western European corporations," Journal of Financial Economics, Elsevier, vol. 65(3), pages 365-395, September.
  38. Jan Hanousek & Evzen Kocenda & Jan Svejnar, 2005. "Origin and Concentration: Corporate Ownership, Control and Performance," CERGE-EI Working Papers wp259, The Center for Economic Research and Graduate Education - Economic Institute, Prague.
  39. Li, Kai & Yue, Heng & Zhao, Longkai, 2009. "Ownership, institutions, and capital structure: Evidence from China," Journal of Comparative Economics, Elsevier, vol. 37(3), pages 471-490, September.
  40. Chernykh, Lucy, 2008. "Ultimate ownership and control in Russia," Journal of Financial Economics, Elsevier, vol. 88(1), pages 169-192, April.
  41. Estrin, Saul & Hanousek, Jan & Svejnar, Jan, 2009. "Effects of Privatization and Ownership in Transition Economies," Policy Research Working Paper Series 4811, The World Bank.
Full references (including those not matched with items on IDEAS)

Citations

Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
as in new window

Cited by:
  1. Jan Hanousek & Evžen Kočenda, 2011. "Extent of the Integrated State Ownership and Effect of the State Control on Performance of Czech Firms," Politická ekonomie, University of Economics, Prague, vol. 2011(1), pages 82-104.
  2. Evžen Kočenda & Jan Hanousek, 2010. "Divide and Privatize : Firms Break-up and Performance," Working Papers 291, Institut für Ost- und Südosteuropaforschung (Institute for East and South-East European Studies).
  3. Baghdasaryan, Delia & la Cour, Lisbeth, 2013. "Competition, ownership and productivity. A panel analysis of Czech firms," Journal of Economics and Business, Elsevier, vol. 69(C), pages 86-100.

Lists

This item is not listed on Wikipedia, on a reading list or among the top items on IDEAS.

Statistics

Access and download statistics

Corrections

When requesting a correction, please mention this item's handle: RePEc:kap:ecopln:v:45:y:2012:i:3:p:157-191. See general information about how to correct material in RePEc.

For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Guenther Eichhorn) or (Christopher F. Baum).

If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

If references are entirely missing, you can add them using this form.

If the full references list an item that is present in RePEc, but the system did not link to it, you can help with this form.

If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your profile, as there may be some citations waiting for confirmation.

Please note that corrections may take a couple of weeks to filter through the various RePEc services.