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Determinants of Ultimate Control of Large Firms in Transition Countries: Empirical Evidence


  • Klaus Gugler
  • Dennis C. Mueller
  • Evgeni Peev


We identify the ultimate ownership structures of the 20 largest firms in 12 transition countries in 1996, and the subsequent patterns of ownership change over 1996-2008. Of the state-controlled companies in 1996 more than half are still in state hands in 2008. Better quality of governmental institutions, larger external but not domestic government debt, smaller company size, and higher company profitability increase the likelihood of privatization as well as the likelihood that the company ends up ultimately in foreign hands. We document that, after 20 years, control structure and institutional quality convergence on the West is still largely incomplete.

Suggested Citation

  • Klaus Gugler & Dennis C. Mueller & Evgeni Peev, 2013. "Determinants of Ultimate Control of Large Firms in Transition Countries: Empirical Evidence," Journal of Institutional and Theoretical Economics (JITE), Mohr Siebeck, Tübingen, vol. 169(2), pages 275-303, June.
  • Handle: RePEc:mhr:jinste:urn:sici:0932-4569(201306)169:2_275:doucol_2.0.tx_2-t
    DOI: 10.1628/093245613X13626680790513

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    References listed on IDEAS

    1. A. Colin Cameron & Jonah B. Gelbach & Douglas L. Miller, 2008. "Bootstrap-Based Improvements for Inference with Clustered Errors," The Review of Economics and Statistics, MIT Press, vol. 90(3), pages 414-427, August.
    2. Simeon Djankov & Peter Murrell, 2002. "Enterprise Restructuring in Transition: A Quantitative Survey," Journal of Economic Literature, American Economic Association, vol. 40(3), pages 739-792, September.
    3. de Melo, Martha & Denizer, Cevdet & Gelb, Alan, 1996. "Patterns of Transition from Plan to Market," World Bank Economic Review, World Bank Group, vol. 10(3), pages 397-424, September.
    4. Kate Bishop & Igor Filatotchev & Tomasz Mickiewicz, 2002. "Endogenous ownership structure: factors affecting the post-privatisation equity in largest Hungarian firms," UCL SSEES Economics and Business working paper series 5, UCL School of Slavonic and East European Studies (SSEES).
    5. 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.
    6. Bortolotti, Bernardo & Fantini, Marcella & Siniscalco, Domenico, 2004. "Privatisation around the world: evidence from panel data," Journal of Public Economics, Elsevier, vol. 88(1-2), pages 305-332, January.
    7. de Melo, Martha & Denizer, Cevdet & Gelb, Alan, 1996. "From plan to market : patterns of transition," Policy Research Working Paper Series 1564, The World Bank.
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    More about this item

    JEL classification:

    • P31 - Economic Systems - - Socialist Institutions and Their Transitions - - - Socialist Enterprises and Their Transitions
    • L33 - Industrial Organization - - Nonprofit Organizations and Public Enterprise - - - Comparison of Public and Private Enterprise and Nonprofit Institutions; Privatization; Contracting Out
    • P36 - Economic Systems - - Socialist Institutions and Their Transitions - - - Consumer Economics; Health; Education and Training; Welfare, Income, Wealth, and Poverty
    • P50 - Economic Systems - - Comparative Economic Systems - - - General


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