Managerial career concerns, privatization and restructuring in transition economies
We set up a dynamic adverse selection model to explain how career concerns may induce managers in state-owned enterprises (SOEs) to restructure their firms. It is shown how government monopsony power over managers led to the ratchet effect under the socialist economy, even under reforms coming short of privatization. The introduction of a managerial labour market, through privatization, introduces competition for managers and eliminates the ratchet effect, thereby inducing managers to restructure. Prospects of privatization also provide incentives to restructure even when managerial skills are asset-specific, provided insider control is strong enough to give managers enough rents from privatization. The model is consistent with the empirical evidence on restructuring of SOEs in transition economies.
(This abstract was borrowed from another version of this item.)
If you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.
As the access to this document is restricted, you may want to look for a different version under "Related research" (further below) or search for a different version of it.
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.:
- Roland, Gerard & Sekkat, Khalid, 2000.
"Managerial career concerns, privatization and restructuring in transition economies,"
European Economic Review,
Elsevier, vol. 44(10), pages 1857-1872, December.
- Roland, Gérard & Sekkat, Khalid, 1996. "Managerial Career Concerns, Privatization and Restructuring in Transition Economies," CEPR Discussion Papers 1363, C.E.P.R. Discussion Papers.
- Gérard Roland & Khalid Sekkat, 2000. "Managerial career concerns, privatization and restructuring in transition economies," ULB Institutional Repository 2013/7340, ULB -- Universite Libre de Bruxelles.
- Grosfeld, Irena & Roland, Gérard, 1995.
"Defensive and Strategic Restructuring in Central European Enterprises,"
CEPR Discussion Papers
1135, C.E.P.R. Discussion Papers.
- Grosfeld, I. & Roland, G., 1995. "Defensive and Strategic Restructuring in Central European Enterprises," DELTA Working Papers 95-18, DELTA (Ecole normale supérieure).
- Mathias Dewatripont & Gérard Roland, 1992.
"The virtues of gradualism and legitimacy in the transition to a market economy,"
ULB Institutional Repository
2013/9587, ULB -- Universite Libre de Bruxelles.
- Dewatripont, M & Roland, G, 1992. "The Virtues of Gradualism and Legitimacy in the Transition to a Market Economy," Economic Journal, Royal Economic Society, vol. 102(411), pages 291-300, March.
- Dewatripont, Mathias & Roland, Gérard, 1991. "The Virtues of Gradualism and Legitimacy in the Transition to a Market Economy," CEPR Discussion Papers 538, C.E.P.R. Discussion Papers.
- Barry W. Ickes & Larry Samuelson, 1987. "Job Transfers and Incentives in Complex Organizations: Thwarting the Ratchet Effect," RAND Journal of Economics, The RAND Corporation, vol. 18(2), pages 275-286, Summer.
- Pinto, Brian & van Wijnbergen, Sweder, 1994.
"Ownership and corporate control in Poland : why state firms defied the odds,"
Policy Research Working Paper Series
1308, The World Bank.
- Pinto, Brian & van Wijnbergen, Sweder, 1995. "Ownership and Corporate Control in Poland: Why State Firms Defied the Odds," CEPR Discussion Papers 1273, C.E.P.R. Discussion Papers.
- Laffont, Jean-Jacques & Tirole, Jean, 1988.
"The Dynamics of Incentive Contracts,"
Econometric Society, vol. 56(5), pages 1153-75, September.
- Wendy Carlin & John Van Reenen & Toby Wolfe, 1995. "Enterprise restructuring in early transition: the case study evidence from Central and Eastern Europe," The Economics of Transition, The European Bank for Reconstruction and Development, vol. 3(4), pages 427-458, December.
- Pinto, Brian & Belka, Marek & Krajewski, Stefan, 1993. "Transforming state enterprises in Poland : macroeconomic evidence on adjustment," Policy Research Working Paper Series 1101, The World Bank.
- Khalid Sekkat & Gérard Roland, 1993.
"Market socialism and the managerial labor market,"
ULB Institutional Repository
2013/7374, ULB -- Universite Libre de Bruxelles.
- Fama, Eugene F, 1980. "Agency Problems and the Theory of the Firm," Journal of Political Economy, University of Chicago Press, vol. 88(2), pages 288-307, April.
- M. Dewatripont & G. Roland, 1992. "Economic Reform and Dynamic Political Constraints," Review of Economic Studies, Oxford University Press, vol. 59(4), pages 703-730.
- John M. Litwack, 1991. "Legality and Market Reform in Soviet-Type Economies," Journal of Economic Perspectives, American Economic Association, vol. 5(4), pages 77-89, Fall.
- Roland, Gérard, 1994.
"On the Speed and Sequencing of Privatization and Restructuring,"
CEPR Discussion Papers
942, C.E.P.R. Discussion Papers.
- Roland, Gerard, 1994. "On the Speed and Sequencing of Privatisation and Restructuring," Economic Journal, Royal Economic Society, vol. 104(426), pages 1158-68, September.
- John M. Litwack, 1993. "Coordination, Incentives, and the Ratchet Effect," RAND Journal of Economics, The RAND Corporation, vol. 24(2), pages 271-285, Summer.
When requesting a correction, please mention this item's handle: RePEc:eee:eecrev:v:44:y:2000:i:10:p:1857-1872. See general information about how to correct material in RePEc.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Zhang, Lei)
If references are entirely missing, you can add them using this form.