The study, based on panel data from 198 industrial enterprises in the Sverdlovsk Oblast during 1992-1996, provides empirical evidence on the impact of privatisation upon the performance of medium, large and extra-large industrial enterprises. The study shows that privatisation "on average" produces performance improvements only in operating profit margin and, to some extent, in the productivity of labour. We revealed that methods (options) of privatisation had not only a positive but also a negative impact on the performance of enterprises. The state seems to be a passive shareholder. However, our results suggest that not only full privatisation but also majority state ownership is preferable to a state minority stakeholding, possibly because of the absence of a monitoring shareholder in the latter case with which to prevent managers achieving their own objectives at the expense of other shareholders. That is why the state should keep majority control over privatised enterprises or diminish its stake below 5% in order to avoid the negative drop in performance results caused by the absence of a monitoring shareholder.
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Paper provided by EERC Research Network, Russia and CIS in its series EERC Working Paper Series with number
2k-01e.
Length: 88 pages Date of creation: 07 Apr 2000 Date of revision: Handle: RePEc:eer:wpalle:2k-01e
Contact details of provider: Postal: EERC Research Network, Russia and CIS, 47, Nakhimovsky pr-t, suite 919, Moscow, 117418 Russia Phone: +7(095)332-4415 Fax: +1(202)478-1968 Web page: http://www.eerc.ru
Find related papers by JEL classification: D21 - Microeconomics - - Production and Organizations - - - Firm Behavior P31 - Economic Systems - - Socialist Institutions and Their Transitions - - - Socialist Enterprises and Their Transitions C23 - Mathematical and Quantitative Methods - - Single Equation Models; Single Variables - - - Models with Panel Data
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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.:
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.
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Rafael La Porta & Florencio Lopez-De-Silanes & Andrei Shleifer, 1999.
"Corporate Ownership Around the World,"
Journal of Finance,
American Finance Association, vol. 54(2), pages 471-517, 04.
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