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Investment Wages and Ownership During the Transition to a Market Economy: Evidence from Slovenian Firms

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  • Janez Prasnikar
  • Jan Svejnar

Abstract

Given the concern about restructuring and the role of insiders during the transition, we analyse the determinants of (and trade-off between) investment and wages in Slovenian firms. We find that investment behaviour is more consistent with the imperfect capital market (internal funds) hypothesis than with the neoclassical or accelerator models. Firms also display a trade-off between investment and wages, and workers share in firms’ surplus and appropriate funds that are supposed to be used for depreciation investment. Most findings are consistent with the principal theoretical models of restructuring. The models, however, underestimate the power of (elite) managers to restrain worker demands and overestimate this power on the part of external owners.

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Bibliographic Info

Paper provided by William Davidson Institute at the University of Michigan in its series William Davidson Institute Working Papers Series with number 144.

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Length: pages
Date of creation: 01 Nov 1998
Date of revision:
Handle: RePEc:wdi:papers:1998-144

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  1. Estrin, Saul & Moore, Robert E & Svejnar, Jan, 1988. "Market Imperfections, Labor Management, and Earnings Differentials in a Developing Country: Theory and Evidence from Yugoslavia," The Quarterly Journal of Economics, MIT Press, MIT Press, vol. 103(3), pages 465-78, August.
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Cited by:
  1. Curtiss, Jarmila & Ratinger, Tomas & Medonos, Tomas, 2012. "Ownership and Investment Behaviour in Transition Countries: A Case Study of Collective and Corporate Farms in the Czech Republic," Working Papers, Factor Markets, Centre for European Policy Studies 122841, Factor Markets, Centre for European Policy Studies.
  2. Curtiss, Jarmila & Ratinger, Tomáš & Medonos, Tomáš, 2012. "Ownership and Investment Behaviour in Transition Countries: A Case Study of Collective and Corporate Farms in the Czech Republic," Factor Markets Working Papers, Centre for European Policy Studies 121, Centre for European Policy Studies.
  3. Polona Domadenik & Lubomir Lizal & Marko Pahor, 2003. "Effect of Enterpise Break-Ups on Performance: Case of Former Yugoslav Republic of Macedonia," CERGE-EI Working Papers wp216, The Center for Economic Research and Graduate Education - Economic Institute, Prague.
  4. Lizal, L., 1999. "Does a Soft Macroeconomic Environment Induce Restructuring on the Microeconomic Level during the Transition Period? Evidence from Investment Behavior of Czech Enterprises," CERGE-EI Working Papers wp147, The Center for Economic Research and Graduate Education - Economic Institute, Prague.

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