Ownership and Firm Performance: Evidence from 25 Countries in Central and Eastern Europe and the Former Soviet Union
AbstractUsing the joint World Bank and EBRD Business Environment and Enterprise Performance Survey (BEEPS), compiled in 1999, this paper explores the relationship between firm performance and ownership in Central and Eastern Europe (CEE) and the Former Soviet Union (FSU). The literature on privatization and performance has been largely inconclusive, especially now that sample selection bias is taken into account. This paper provides evidence that foreign owned firms perform the best, performing significantly better than state owned enterprises, while firms whose owners are domestic outside companies or individuals also perform better than state owned enterprises but the result is somewhat sensitive to the specification of the model. The more significant, albeit puzzling result, is that insider owned firms perform worse than state owned firms. This result is not significant when looking at manager and worker owned firms separately. In further work, I will explore the determinants of this puzzling result.
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Length: 18 pages
Date of creation: 10 Jul 2002
Date of revision:
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transition; privatization; ownership; firm performance;
Find related papers by JEL classification:
- P - Economic Systems
This paper has been announced in the following NEP Reports:
- NEP-ALL-2002-07-31 (All new papers)
- NEP-EFF-2002-10-27 (Efficiency & Productivity)
- NEP-ENT-2002-07-04 (Entrepreneurship)
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