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Continuity Under a Different Name: The Outcome of Privatisation in Serbia

Author

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  • Vladan Ivanović
  • Vadim Kufenko
  • Boris Begović
  • Nenad Stanišić
  • Vincent Geloso

Abstract

Normally, privatisation is seen as beneficial. This paper considers the case of Serbia – a latecomer in the matter – where privatisation was partly a result of exogenous pressures and where the process has been deemed a failure. In Serbia, a sizeable number of privatised firms were bought by bureaucrats and politicians and all firms were subjected to a period of supervision. We argue that the design of this process allowed rent-seekers to conserve their privileges through asset-stripping, which explains the failure. In order to do so, we perform an empirical analysis of the determinants of liquidation, merger and bankruptcy of privatised firms from 2002 to 2015. We construct a novel data set from primary sources, free of the ‘survivorship bias’ and containing proxies for various types of owners, indirect signs of asset-stripping strategy and a broad range of controls. Our results indicate that firms owned by politicians faced significantly higher risks of bankruptcy, especially after the end of supervision.

Suggested Citation

  • Vladan Ivanović & Vadim Kufenko & Boris Begović & Nenad Stanišić & Vincent Geloso, 2019. "Continuity Under a Different Name: The Outcome of Privatisation in Serbia," New Political Economy, Taylor & Francis Journals, vol. 24(2), pages 159-180, March.
    • Handle: RePEc:taf:cnpexx:v:24:y:2019:i:2:p:159-180
    DOI: 10.1080/13563467.2018.1426563
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    Cited by:

    1. Finn Tarp & Sam Jones & Felix Schilling, 2021. "Doing business while holding public office: Evidence from Mozambique’s firm registry," DERG working paper series 21-08, University of Copenhagen. Department of Economics. Development Economics Research Group (DERG).
    2. Ivanović, Vladan & Kufenko, Vadim, 2023. "It's a man's world? The rise of female entrepreneurship during privatization in Serbia," Economic Systems, Elsevier, vol. 47(3).
    3. Will Bartlett, 2023. "The performance of politically connected firms in South East Europe: state capture or business capture?," Post-Communist Economies, Taylor & Francis Journals, vol. 35(4), pages 351-367, May.
    4. Ivanović, Vladan & Kufenko, Vadim, 2020. "It's a man's world? The rise of female entrepreneurship during privatization in Serbia," Hohenheim Discussion Papers in Business, Economics and Social Sciences 07-2020, University of Hohenheim, Faculty of Business, Economics and Social Sciences.
    5. Lidia Ceriani & Simona Scabrosetti & Francesco Scervini, 2022. "Inequality, Privatization and Democratic Institutions in Developing Countries," Hacienda Pública Española / Review of Public Economics, IEF, vol. 240(1), pages 95-124, March.
    6. Geloso, Vincent & Kufenko, Vadim & Arsenault-Morin, Alex P., 2023. "The lesser shades of labor coercion: The impact of seigneurial tenure in nineteenth-century Quebec," Journal of Development Economics, Elsevier, vol. 163(C).
    7. Ivanović, Vladan & Uberti, Luca J. & Imami, Drini, 2023. "Opportunistic privatization," European Journal of Political Economy, Elsevier, vol. 80(C).

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