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Privatisation, corporate control and employment growth: evidence from a panel of large Polish firms, 1996-2002

Listed author(s):
  • Tomasz Marek Mickiewicz

    ()

    (UCL School of Slavonic and East European Studies)

  • Christopher Gerry

    ()

    (UCL School of Slavonic and East European Studies)

  • Kate Bishop

    ()

    (Office for National Statistics, 1 Drummond Gate, London SW1V 2QQ)

Using panel data on large Polish firms this paper examines the relationship between corporate control structures, sales growth and the determinants of employment change during the period 1996-2002. We find that privatised and de novo firms are the main drivers of employment growth and that, in the case of de novo firms, it is foreign ownership which underpins the result. Interestingly, we find that being privatised has a positive impact on employment growth but that this impact is concentrated within a range of three to six years after privatisation. In contrast with the findings of earlier literature, we find evidence that there are no systematic differences in employment response to negative sales growth across the ownership categories. On the other hand, employment in state firms is less responsive to positive sales growth. From these combined results we infer that the behaviour of state firms is constrained by both insider rent sharing and binding budget constraints. Consistent with this, we find that privatised companies, three to six years post-privatisation, are the firms for whom employment is most responsive to positive sales growth and as such, offer the best hope for rapid labour market expansion.

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File URL: http://discovery.ucl.ac.uk/17526/1/17526.pdf
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Paper provided by UCL School of Slavonic and East European Studies (SSEES) in its series UCL SSEES Economics and Business working paper series with number 47.

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Length: 38 pages
Date of creation: 2004
Handle: RePEc:see:wpaper:47
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