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Firm Performance and the Political Economy of Corporate Governance: Survey Evidence for Bulgaria, Hungary, Slovakia and Slovenia

  • Patrick Paul Walsh
  • Ciara Whelan

Using survey data for 220 traditional manufacturing firms over 7 years of transition and 4 CEE countries we show that firms which produced for the EU market under planning consistently outperform those that traditionally produced for the CMEA market. A gradualist selection process to outside privatisation of previously CMEA oriented firms induces outside ownership to outperform insider/state owned firms. A resistance to outside privatisation in firms inheriting EU markets ensures that ownership structure has no effect on firm performance. Conditioning our analysis on initial demand conditions helps unravel puzzling empirical outcomes in relation to issues of corporate governance during transition.

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Paper provided by LICOS - Centre for Institutions and Economic Performance, KU Leuven in its series LICOS Discussion Papers with number 8599.

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Length: 35 pages
Date of creation: 1999
Date of revision:
Handle: RePEc:lic:licosd:8599
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