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Privatization And Survival – Evidence From A Russian Firm Survey

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  • Carsten Sprenger

Abstract

This study is dedicated to an important aspect of the long-run performance of firms, namely their survival under rapidly changing conditions in a transition economy. The analysis is focused on the question of whether privatization and ownership structure have affected the likelihood of liquidation and bankruptcy of firms in Russia. We use a sample of 497 privatized and non-privatized firms that were surveyed in 1999-2000, and for which information was collected about their survival status and reasons for exit, such as bankruptcy, mergers and court decisions. More than 38% of the sample firms were liquidated over the period 1999 to 2013. We find that privatization and the choice of privatization option have no effect on the long-term survival of firms in Russia, but that managerial ownership lowers the likelihood of both liquidation and bankruptcy. Other transition-specific predictors of bankruptcy, such as the extent of price controls and the amount of wage arrears, affect firm exit in a significant way.

Suggested Citation

  • Carsten Sprenger, 2014. "Privatization And Survival – Evidence From A Russian Firm Survey," Economic Annals, Faculty of Economics, University of Belgrade, vol. 59(200), pages 43-60, January –.
  • Handle: RePEc:beo:journl:v:59:y:2014:i:200:p:43-60
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    1. 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.
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    Cited by:

    1. Ivanovic, Vladan & Kufenko, Vadim & Begovic, Boris & Stanisic, Nenad & Geloso, Vincent, 2016. "Continuity under a different name: The outcome of privatisation in Serbia," Hohenheim Discussion Papers in Business, Economics and Social Sciences 10-2016, University of Hohenheim, Faculty of Business, Economics and Social Sciences.
    2. Iwasaki, Ichiro & Maurel, Mathilde & Meunier, Bogdan, 2016. "Firm entry and exit during a crisis period: Evidence from Russian regions," Russian Journal of Economics, Elsevier, vol. 2(2), pages 162-191.
    3. Ichiro Iwasaki & Mathilde Maurel, 2017. "The Impact of Crisis on Firm Creation and Regeneration in Russia: Regional Panel Data Analysis," Université Paris1 Panthéon-Sorbonne (Post-Print and Working Papers) halshs-01505659, HAL.

    More about this item

    Keywords

    survival analysis; privatization; ownership structure; liquidation; bankruptcy; Russia;

    JEL classification:

    • G32 - Financial Economics - - Corporate Finance and Governance - - - Financing Policy; Financial Risk and Risk Management; Capital and Ownership Structure; Value of Firms; Goodwill
    • G33 - Financial Economics - - Corporate Finance and Governance - - - Bankruptcy; Liquidation
    • G34 - Financial Economics - - Corporate Finance and Governance - - - Mergers; Acquisitions; Restructuring; Corporate Governance
    • L33 - Industrial Organization - - Nonprofit Organizations and Public Enterprise - - - Comparison of Public and Private Enterprise and Nonprofit Institutions; Privatization; Contracting Out
    • P34 - Economic Systems - - Socialist Institutions and Their Transitions - - - Finance

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