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Divide and Privatize: Firm Break-up and Performance

  • Evžen Kocenda
  • Jan Hanousek

We analyze the long-term effects of firm break-up and ownership change on corporate performance. Our analysis is based on a unique data set for a large number of Czech firms spanning the period 1996–2005. We employ a propensity score matching procedure to deal with endogeneity problems. Our results, which are generally in line with the positive effects of firm break-up found in the developed-market literature, show that the initial effects of firm break-up are positive but after a certain point they quickly diminish over time. Factors like changes in ownership structure and management are to be found behind later improvements in the performance of firms.

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Paper provided by CESifo Group Munich in its series CESifo Working Paper Series with number 3465.

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Date of creation: 2011
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Handle: RePEc:ces:ceswps:_3465
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