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Restructuring of firms in transition: ownership, institutions and openness to trade

Author

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  • Polona Domadenik

    (Faculty of Economics and Institute for South-East Europe, University of Ljubljana, Slovenia)

  • Janez Prašnikar

    (Faculty of Economics and Institute for South-East Europe, University of Ljubljana, Slovenia)

  • Jan Svejnar

    (Gerald R. Ford School of Public Policy, University of Michigan, Ann Arbor, USA)

Abstract

We develop a theoretical framework for defensive and strategic restructuring, and provide estimates of restructuring in privatized firms in an advanced transition economy: Slovenia. Our rich data point to both types of restructuring, as well credit rationing and bargaining with respect to investment. Privatized firms display profit-maximizing behavior, and a firm's export orientation and institutional features, such as insider vs outsider privatization, employee ownership, and employee control, do not affect the firm's employment and investment behavior. The results suggest that a major exposure to world competition induces similar economic behavior in firms with different structural and institutional characteristics. Journal of International Business Studies (2008) 39, 725–746. doi:10.1057/palgrave.jibs.8400379

Suggested Citation

  • Polona Domadenik & Janez Prašnikar & Jan Svejnar, 2008. "Restructuring of firms in transition: ownership, institutions and openness to trade," Journal of International Business Studies, Palgrave Macmillan;Academy of International Business, vol. 39(4), pages 725-746, June.
    • Handle: RePEc:pal:jintbs:v:39:y:2008:i:4:p:725-746
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    Citations

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    Cited by:

    1. Lars Schweizer & Andreas Nienhaus, 2017. "Corporate distress and turnaround: integrating the literature and directing future research," Business Research, Springer;German Academic Association for Business Research, vol. 10(1), pages 3-47, June.
    2. Canan Mutlu & Wu Zhan & Mike Peng & Zhiang Lin, 2015. "Competing in (and out of) transition economies," Asia Pacific Journal of Management, Springer, vol. 32(3), pages 571-596, September.
    3. Domadenik, Polona & Far?nik, Daša & Pastore, Francesco, 2013. "Horizontal Mismatch in the Labour Market of Graduates: The Role of Signalling," IZA Discussion Papers 7527, Institute of Labor Economics (IZA).
    4. Mitja Cok & Polona Domadenik & Tjasa Redek & Miroslav Verbic, 2009. "Labour market reforms in the context of political power theory: The case of Slovenia," Zbornik radova Ekonomskog fakulteta u Rijeci/Proceedings of Rijeka Faculty of Economics, University of Rijeka, Faculty of Economics and Business, vol. 27(1), pages 57-82.
    5. David Hillier & Julio Pindado & Valdoceu de Queiroz & Chabela de la Torre, 2011. "The impact of country-level corporate governance on research and development," Journal of International Business Studies, Palgrave Macmillan;Academy of International Business, vol. 42(1), pages 76-98, January.
    6. Domadenik, Polona & Prašnikar, Janez & Svejnar, Jan, 2014. "Legal Corruption, Politically Connected Corporate Governance and Firm Performance," IZA Discussion Papers 8321, Institute of Labor Economics (IZA).
    7. Kafouros, Mario & Aliyev, Murod, 2016. "Institutional development and firm profitability in transition economies," Journal of World Business, Elsevier, vol. 51(3), pages 369-378.
    8. Koman, Matjaž & Laki?evi?, Milan & Prašnikar, Janez & Svejnar, Jan, 2013. "Asset Stripping, Rule of Law and Firm Survival: The Hoff-Stiglitz Model and Mass Privatization in Montenegro," IZA Discussion Papers 7821, Institute of Labor Economics (IZA).
    9. Iraj Hashi & Nebojša Stojčić, 2013. "Knowledge Spillovers, Innovation Activities, And Competitiveness Of Industries In Eu Member And Candidate Countries," Economic Annals, Faculty of Economics and Business, University of Belgrade, vol. 58(198), pages 7-34, July - Se.
    10. Polona Domadenik & Janez Prašnikar & Jan Svejnar, 2016. "Political Connectedness, Corporate Governance, and Firm Performance," Journal of Business Ethics, Springer, vol. 139(2), pages 411-428, December.
    11. Koman, Matjaž & Lakićević, Milan & Prašnikar, Janez & Svejnar, Jan, 2015. "Asset stripping and firm survival in mass privatization: Testing the Hoff-Stiglitz and Campos-Giovannoni models in Montenegro," Journal of Comparative Economics, Elsevier, vol. 43(2), pages 274-289.
    12. Polona Domadenik & Bojan Ivanc & Denis Marinšek, 2018. "Productivity of Slovenian Firms," European Economy - Discussion Papers 078, Directorate General Economic and Financial Affairs (DG ECFIN), European Commission.
    13. Bersant Hobdari & Aleksandra Gregoric & Evis Sinani, 2011. "The role of firm ownership on internationalization: evidence from two transition economies," Journal of Management & Governance, Springer;Accademia Italiana di Economia Aziendale (AIDEA), vol. 15(3), pages 393-413, August.
    14. Antonia Mercedes García-Cabrera & María Gracia García-Soto, 2023. "Subnational institutional configurations and international expansion of SMEs in emerging economies," Journal of International Entrepreneurship, Springer, vol. 21(1), pages 31-59, March.
    15. Evzen Kocenda & Jan Hanousek, 2012. "Firm break-up and performance," Economics of Governance, Springer, vol. 13(2), pages 121-143, June.
    16. Curtiss, Jarmila & Ratinger, Tomáš & Medonos, Tomáš, 2012. "Ownership and Investment Behaviour in Transition Countries: A Case Study of Collective and Corporate Farms in the Czech Republic," Factor Markets Working Papers 121, Centre for European Policy Studies.
    17. Petrovic, Pero & Cerovic, Slobodan, 2010. "The Ownership Structure As A Corporate Governance Mechanism In Serbian Hotels," UTMS Journal of Economics, University of Tourism and Management, Skopje, Macedonia, vol. 1(1), pages 93-98.
    18. Bersant Hobdari, 2008. "Insider Ownership and Capital Constraints: An Empirical Investigation of the Credit Rationing Hypothesis in Estonia," Corporate Governance: An International Review, Wiley Blackwell, vol. 16(6), pages 536-549, November.
    19. Antonia Mercedes García-Cabrera & María Gracia García-Soto & Juan José Durán-Herrera, 2016. "Opportunity motivation and SME internationalisation in emerging countries: Evidence from entrepreneurs’ perception of institutions," International Entrepreneurship and Management Journal, Springer, vol. 12(3), pages 879-910, September.
    20. Gregorič, Aleksandra, 2022. "Board-level worker representation," GLO Discussion Paper Series 1136, Global Labor Organization (GLO).
    21. Tomac Cater & Danijel Pucko, 2010. "Factors of effective strategy implementation: Empirical evidence from Slovenian business practice," Journal of East European Management Studies, Nomos Verlagsgesellschaft mbH & Co. KG, vol. 15(3), pages 207-236.
    22. Curtiss, Jarmila & Ratinger, Tomas & Medonos, Tomas, 2012. "Ownership and Investment Behaviour in Transition Countries: A Case Study of Collective and Corporate Farms in the Czech Republic," Working papers 122841, Factor Markets, Centre for European Policy Studies.
    23. Dau, Luis Alfonso & Moore, Elizabeth M. & Kostova, Tatiana, 2020. "The impact of market based institutional reforms on firm strategy and performance: Review and extension," Journal of World Business, Elsevier, vol. 55(4).
    24. Prasnikar, Janez & Mikerevic, Dragan & Voje, Damjan, 2014. "Blockholding and organisational diversity: the case of a transition economy," Journal of East European Management Studies, Nomos Verlagsgesellschaft mbH & Co. KG, vol. 19(3), pages 277-304.
    25. Nebojsa Stojcic, 2012. "Patterns And Determinants Of Enterprise Restructuring In Central And East European Countries," Economic Thought and Practice, Department of Economics and Business, University of Dubrovnik, vol. 21(2), pages 429-456, december.

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