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Ownership and Firm Performance: Evidence from 25 Countries in Central and Eastern Europe and the Former Soviet Union

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Author Info

  • Richard B. Goud Jr.

    (Reed College undergraduate student)

Abstract

Using 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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File URL: http://128.118.178.162/eps/dev/papers/0207/0207002.pdf
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Bibliographic Info

Paper provided by EconWPA in its series Development and Comp Systems with number 0207002.

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Length: 18 pages
Date of creation: 10 Jul 2002
Date of revision:
Handle: RePEc:wpa:wuwpdc:0207002

Note: Type of Document - PDF; pages: 18; figures: No figures but a few tables all at the end of the paper.
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Web page: http://128.118.178.162

Related research

Keywords: transition; privatization; ownership; firm performance;

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References

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  1. Konings, Jozef, 1997. "Firm growth and ownership in transition countries," Economics Letters, Elsevier, vol. 55(3), pages 413-418, September.
  2. Blanchard, O. & Aghion, P., 1996. "On insider privatization," European Economic Review, Elsevier, vol. 40(3-5), pages 759-766, April.
  3. Estrin, Saul & Rosevear, Adam, 1999. "Enterprise performance and ownership: The case of Ukraine," European Economic Review, Elsevier, vol. 43(4-6), pages 1125-1136, April.
  4. Gérard Roland & Khalid Sekkat, 2000. "Managerial career concerns, privatization and restructuring in transition economies," ULB Institutional Repository 2013/7340, ULB -- Universite Libre de Bruxelles.
  5. Lubomir Lizal & Jan Svejnar, 1997. "Enterprise Investment During the Transition: Evidence from Czech Panel Data," William Davidson Institute Working Papers Series 60, William Davidson Institute at the University of Michigan.
  6. John S. Earle, 1999. "Post-Privatisation Ownership Structure and Productivity in Russian Industrial Enterprises," Working Papers 1999.19, Fondazione Eni Enrico Mattei.
  7. Alan Bevan & Saul Estrin & Mark E. Schaffer, 1999. "Determinants of Enterprise Performance during Transition," CERT Discussion Papers 9903, Centre for Economic Reform and Transformation, Heriot Watt University.
  8. Patrick Paul Walsh & Ciara Whelan, 2000. "Firm Performance and the Political Economy of Corporate Governance: Survey Evidence for Bulgaria, Hungary, Slovakia and Slovenia," William Davidson Institute Working Papers Series 338, William Davidson Institute at the University of Michigan.
  9. Roman Frydman & Cheryl Gray & Marek Hessel & Andrzej Rapaczynski, 1999. "When Does Privatization Work? The Impact Of Private Ownership On Corporate Performance In The Transition Economies," The Quarterly Journal of Economics, MIT Press, vol. 114(4), pages 1153-1191, November.
  10. Megginson, William L & Nash, Robert C & van Randenborgh, Matthias, 1994. " The Financial and Operating Performance of Newly Privatized Firms: An International Empirical Analysis," Journal of Finance, American Finance Association, vol. 49(2), pages 403-52, June.
  11. Nandini Gupta & John Ham & Jan Svejnar, 2000. "Priorities and Sequencing in Privatization: Theory and Evidence from the Czech Republic," Econometric Society World Congress 2000 Contributed Papers 1580, Econometric Society.
  12. Stijn Claesens & Simeon Djankov & Gerhard Pohl, 1997. "Ownership and Corporate Governance : Evidence from the Czech Republic," World Bank Other Operational Studies 11584, The World Bank.
  13. A. Marcincin & S. van Wijnbergen, 1997. "The Impact of Czech Privatisation Methods on Enterprise Performance Incorporating Initial Selection Bias Correction," CERT Discussion Papers 9704, Centre for Economic Reform and Transformation, Heriot Watt University.
  14. Boycko, Maxim & Shleifer, Andrei & Vishny, Robert W, 1996. "A Theory of Privatisation," Economic Journal, Royal Economic Society, vol. 106(435), pages 309-19, March.
  15. Kikeri, Sunita & Nellis, John & Shirley, Mary, 1994. "Privatization: Lessons from Market Economies," World Bank Research Observer, World Bank Group, vol. 9(2), pages 241-72, July.
  16. Nellis, J., 1999. "Time to Rethink Privatization in Transition Economies?," Papers 38, World Bank - International Finance Corporation.
  17. Georgiy Nikitin & Andrew Weiss, . "Effects of Ownership Composition on Performance: Evidence from the Czech Republic," Boston University - Department of Economics - The Institute for Economic Development Working Papers Series dp-116, Boston University - Department of Economics, revised Dec 2001.
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