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Asset Strippers

Author

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  • Campos, Nauro F

    (University of Newcastle)

  • Francesco Giovannoni

Abstract

During the transition from plan to market, managers and politicians succeeded in maintaining de facto ownership of assets. This paper puts forward a theoretical model and econometric evidence on asset stripping in transition. We argue that it is driven by the value of the stripped assets, the probability of punishment and political power (the latter proxied by firm size). Using 1997 survey data for about 950 firms in five countries, we find that (1) firm size is a chief determinant of asset stripping and (2) there is strong support for the predicted non-linear relationship between potential profitability and the use of stripped assets.

Suggested Citation

  • Campos, Nauro F & Francesco Giovannoni, 2003. "Asset Strippers," Royal Economic Society Annual Conference 2003 35, Royal Economic Society.
    • Handle: RePEc:ecj:ac2003:35
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    More about this item

    Keywords

    asset stripping; transition;

    JEL classification:

    • H82 - Public Economics - - Miscellaneous Issues - - - Governmental Property
    • K42 - Law and Economics - - Legal Procedure, the Legal System, and Illegal Behavior - - - Illegal Behavior and the Enforcement of Law
    • O17 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Formal and Informal Sectors; Shadow Economy; Institutional Arrangements
    • P26 - Political Economy and Comparative Economic Systems - - Socialist and Transition Economies - - - Property Rights
    • P31 - Political Economy and Comparative Economic Systems - - Socialist Institutions and Their Transitions - - - Socialist Enterprises and Their Transitions

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