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The Determinants of Privatized Enterprise Performance in Russia

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  • Angelucci, Manuela
  • Bevan, Alan
  • Estrin, Saul
  • Fennema, Julian A
  • Kuznetsov, Boris
  • Mangiarotti, Giovanni
  • Schaffer, Mark E

Abstract

Using data from a large enterprise-level panel designed to address this issue, we account for enterprise performance in Russia. We link performance to four aspects of the economic environment outlined in the literature: enterprise ownership; corporate governance; market structures and competition; and financial constraints. We conclude that private ownership and better performance are not correlated, though restructuring is positively associated with the competitiveness of the market environment. These findings on private ownership support those of previous studies, eg Earle and Estrin (1997). Moreover, we find only limited evidence that financially unconstrained firms are better in their undertaking of restructuring measures then financially constrained firms. Further analysis suggests that causality runs from restructuring to financial constraint, rather than the reverse. Finally, our findings indicate strong complementarities between the four factors influencing improved company performance, confirming the view that these factors need to be considered jointly.

Suggested Citation

  • Angelucci, Manuela & Bevan, Alan & Estrin, Saul & Fennema, Julian A & Kuznetsov, Boris & Mangiarotti, Giovanni & Schaffer, Mark E, 2002. "The Determinants of Privatized Enterprise Performance in Russia," CEPR Discussion Papers 3193, C.E.P.R. Discussion Papers.
  • Handle: RePEc:cpr:ceprdp:3193
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    1. repec:taf:pocoec:v:30:y:2018:i:3:p:290-333 is not listed on IDEAS
    2. Pertti Haaparanta & Tuuli Juurikkala & Olga Lazareva & Jukka Pirttila & Laura Solanko & Ekaterina Zhuravskaya, 2003. "Firms And Public Service Provision In Russia," Working Papers w0041, Center for Economic and Financial Research (CEFIR).
    3. Bhaumik, Sumon Kumar & Estrin, Saul, 2007. "How transition paths differ: Enterprise performance in Russia and China," Journal of Development Economics, Elsevier, vol. 82(2), pages 374-392, March.
    4. Leppänen, Simo & Linden, Mikael & Solanko, Laura, 2009. "Firm behavior under production uncertainty : Evidence from Russia," BOFIT Discussion Papers 16/2009, Bank of Finland, Institute for Economies in Transition.
    5. Tuuli Juurikkala & Olga Lazareva, 2004. "To Divest or not to Divest? Social Assets in Russian Firms," ERSA conference papers ersa04p637, European Regional Science Association.
    6. Sumon Bhaumik & Saul Estrin, 2003. "Why Transition Paths Differ: Russian and Chinese Enterprise Performance Compared," William Davidson Institute Working Papers Series 525, William Davidson Institute at the University of Michigan.
    7. Juurikkala, Tuuli & Lazareva, Olga, 2006. "Lobbying at the local level : social assets in Russian firms," BOFIT Discussion Papers 1/2006, Bank of Finland, Institute for Economies in Transition.
    8. repec:hig:fsight:v:11:y:2017:i:3:p:83-93 is not listed on IDEAS
    9. Ichiro IWASAKI & Satoshi MIZOBATA, 2018. "Post-Privatization Ownership And Firm Performance: A Large Meta-Analysis Of The Transition Literature," Annals of Public and Cooperative Economics, Wiley Blackwell, vol. 89(2), pages 263-322, June.
    10. Jose Noguera, 2004. "Is Barter a Hobson’s Choice? A theory of barter and credit rationing," CERGE-EI Working Papers wp239, The Center for Economic Research and Graduate Education - Economics Institute, Prague.
    11. Iwasaki, Ichiro, 2017. "Corporate Governance System and Regional Heterogeneity: Evidence from East and West Russia," RRC Working Paper Series 72, Russian Research Center, Institute of Economic Research, Hitotsubashi University.
    12. Jos?? Noguera & Susan J. Linz, 2005. "Barter, Credit, and Welfare: A theoretical inquiry into the barter phenomenon in Russia," William Davidson Institute Working Papers Series wp757, William Davidson Institute at the University of Michigan.
    13. Olga Suhomlinova, 2006. "Toward a Model of Organizational Co-Evolution in Transition Economies," Journal of Management Studies, Wiley Blackwell, vol. 43(7), pages 1537-1558, November.
    14. Luo, Yongli, 2015. "CEO power, ownership structure and pay performance in Chinese banking," Journal of Economics and Business, Elsevier, vol. 82(C), pages 3-16.
    15. Naohito Abe & Ichiro Iwasaki, 2010. "Organisational culture and corporate governance in Russia: a study of managerial turnover," Post-Communist Economies, Taylor & Francis Journals, vol. 22(4), pages 449-470.
    16. Rinaldi, Gustavo, 2008. "The size of the firm in a transitional economy: Downsizing and economies of scale: The case of Russian footwear," Economic Systems, Elsevier, vol. 32(4), pages 389-409, December.
    17. Irina Denisova & Stanislav Kolenikov & Ksenia Yudaeva, 2000. "Child Benefits and Child Poverty," Working Papers w0006, Center for Economic and Financial Research (CEFIR).
    18. Saul Estrin, 2002. "Competition and Corporate Governance in Transition," Journal of Economic Perspectives, American Economic Association, vol. 16(1), pages 101-124, Winter.
    19. Ichiro Iwasaki, 2007. "Enterprise Reform And Corporate Governance In Russia: A Quantitative Survey," Journal of Economic Surveys, Wiley Blackwell, vol. 21(5), pages 849-902, December.
    20. Ichiro Iwasaki & Satoshi Mizobata & Alexander Muravyev, 2018. "Ownership dynamics and firm performance in an emerging economy: a meta-analysis of the Russian literature," Post-Communist Economies, Taylor & Francis Journals, vol. 30(3), pages 290-333, May.
    21. Ariane Lambert-Mogiliansky & Konstantin Sonin & Ekaterina Zhuravskaya, 2003. "Capture of Bankruptcy: Theory and Russian Evidence," Working Papers w0038, Center for Economic and Financial Research (CEFIR).
    22. Saul Estrin, 2001. "Competition and Corporate Governance in Transition," William Davidson Institute Working Papers Series 431, William Davidson Institute at the University of Michigan.
    23. Rinaldi, Gustavo, 2007. "Redundancies in an industry in transition: who gets fired and why? Evidence from one consumer-goods industry in Russia," MPRA Paper 21940, University Library of Munich, Germany.
    24. Jose Noguera & Susan Linz, 2003. "A Theoretical Model of Barter in Russia," CERGE-EI Working Papers wp207, The Center for Economic Research and Graduate Education - Economics Institute, Prague.
    25. Benjamin Maury & Eva Liljeblom, 2009. "Oligarchs, political regime changes, and firm valuation," The Economics of Transition, The European Bank for Reconstruction and Development, vol. 17(3), pages 411-438, July.

    More about this item

    Keywords

    competition; corporate governance; enterprise performance; investment; privatization;

    JEL classification:

    • D21 - Microeconomics - - Production and Organizations - - - Firm Behavior: Theory
    • G34 - Financial Economics - - Corporate Finance and Governance - - - Mergers; Acquisitions; Restructuring; Corporate Governance
    • L10 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance - - - General
    • P31 - Economic Systems - - Socialist Institutions and Their Transitions - - - Socialist Enterprises and Their Transitions

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