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State ownership and control in the Czech Republic

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  • Evžen Kočenda

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  • 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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    Citations

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    Cited by:

    1. Baghdasaryan, Delia & la Cour, Lisbeth, 2013. "Competition, ownership and productivity. A panel analysis of Czech firms," Journal of Economics and Business, Elsevier, vol. 69(C), pages 86-100.
    2. Iwasaki, Ichiro & Kočenda, Evžen, 2017. "Are some owners better than others in Czech privatized firms? Even meta-analysis can’t make us perfectly sure," Economic Systems, Elsevier, vol. 41(4), pages 537-568.
    3. Evžen Kočenda & Jan Hanousek, 2010. "Divide and Privatize : Firms Break-up and Performance," Working Papers 291, Leibniz Institut für Ost- und Südosteuropaforschung (Institute for East and Southeast European Studies).
    4. Baumöhl, Eduard & Iwasaki, Ichiro & Kočenda, Evžen, 2017. "Firm Survival in New EU Member States," CEI Working Paper Series 2017-5, Center for Economic Institutions, Institute of Economic Research, Hitotsubashi University.
    5. Jan Hanousek & Evžen Kočenda, 2011. "Rozsah integrovaného státního vlastnictví a vliv firemní kontroly na výkonnost českých podniků
      [Extent of the Integrated State Ownership and Effect of the State Control on Performance of Czech Firm
      ," Politická ekonomie, University of Economics, Prague, vol. 2011(1), pages 82-104.

    More about this item

    Keywords

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

    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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