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State ownership and control in the Czech Republic

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  • Evžen Kočenda
  • Jan Hanousek

Abstract

We analyze the extent of the integrated control of the state over privatized firms during the post-privatization decade (1995–2005) in the Czech Republic. During this period the integrated control potential of the state resembled a corporate pyramid. While pyramidal control was not fully utilized, the golden share in the hands of the state substantially enhanced its ability to control firms. In terms of corporate performance we show that state control resulted in declining and even negative corporate performance. Integrated state control was shown to be mostly inferior when compared with private types of ownership. State ownership positions are in striking contrast with the lack of capacity to push corporate performance in order to collect larger tax volumes. Lack of focus and inter-agency cooperation as well as the simple inefficiency of the state bureaucracy are the most likely reasons behind our findings. Copyright Springer Science+Business Media, LLC. 2012

Suggested Citation

  • Evžen Kočenda & Jan Hanousek, 2012. "State ownership and control in the Czech Republic," Economic Change and Restructuring, Springer, vol. 45(3), pages 157-191, August.
  • Handle: RePEc:kap:ecopln:v:45:y:2012:i:3:p:157-191
    DOI: 10.1007/s10644-011-9114-z
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    More about this item

    Keywords

    Corporate pyramid; State ownership; Privatization; Corporate performance; Voting rights; Golden share; C51; D23; D24; L23; P26;
    All these keywords.

    JEL classification:

    • C30 - Mathematical and Quantitative Methods - - Multiple or Simultaneous Equation Models; Multiple Variables - - - General
    • D21 - Microeconomics - - Production and Organizations - - - Firm Behavior: Theory
    • D29 - Microeconomics - - Production and Organizations - - - Other
    • G30 - Financial Economics - - Corporate Finance and Governance - - - General
    • L21 - Industrial Organization - - Firm Objectives, Organization, and Behavior - - - Business Objectives of the Firm

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