The restructuring of large firms in Slovakia
The restructuring of large enterprises has received much attention in the transition of centrally planned economies to market economies. The need to transform these enterprises into viable firms is widely acknowledged. The extent of such restructuring and the determinants that underlie a successful transformation are less studied. Various schemes for dealing with large enterprises have been tried. The effect of such programs is hard to measure since the restructuring of enterprises (or the lack thereof) has taken place in the context of significant changes in the overall economic environment. Notwithstanding the difficulty in such measurement, a proper evaluation is crucial for designing further reform policies. This paper extends the literature on the microeconomics of transition by re-examining the stylized facts about firm restructuring in the light of new empirical evidence. The study is based on twenty-one case studies of Slovak firms and uses detailed financial information for the 1991-96 period and interviews with top management. A large part of sample represents firms that were initially classified as non-viable loss-makers. This study also throws some new queries on the effectiveness of different privatization methods in enhancing corporate governance and improving access to skills and capital. Author find that privatization to insiders through management-employee buy-outs did not hamper firm restructuring as the new owners (old managers) invested heavily in new technology, laid off substantial part of their workforce, sought foreign partnerships, and were prepared to sell controlling stakes to outsiders in return for fresh financial resources. The main objective of the privatization program should be the speedy transformation of ownership, not the selection of perfect owner.
|Date of creation:||30 Apr 1997|
|Contact details of provider:|| Postal: 1818 H Street, N.W., Washington, DC 20433|
Phone: (202) 477-1234
Web page: http://www.worldbank.org/
More information through EDIRC
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- Caves, Richard E., 1990. "Lessons from privatization in Britain : State enterprise behavior, public choice, and corporate governance," Journal of Economic Behavior & Organization, Elsevier, vol. 13(2), pages 145-169, March.
- Djankov, Simeon & Hoekman, Bernard, 1997. "Trade reorientation and productivity growth in Bulgarian enterprises," Policy Research Working Paper Series 1707, The World Bank.
- Blanchard, Olivier, 1996. "Theoretical Aspects of Transition," American Economic Review, American Economic Association, vol. 86(2), pages 117-122, May.
- Aghion, Philippe & Blanchard, Olivier & Burgess, Robin, 1994. "The behaviour of state firms in eastern Europe, pre-privatisation," European Economic Review, Elsevier, vol. 38(6), pages 1327-1349, June.
- Sachs, Jeffrey D, 1996. "The Transition at Mid Decade," American Economic Review, American Economic Association, vol. 86(2), pages 128-133, May.
- Claessens, Stijn & Djankov, Simeon & Pohl, Gerhard, 1997.
"Ownership and corporate governance : evidence from the Czech Republic,"
Policy Research Working Paper Series
1737, The World Bank.
- Stijn Claesens & Simeon Djankov & Gerhard Pohl, 1997. "Ownership and Corporate Governance : Evidence from the Czech Republic," World Bank Other Operational Studies 11584, The World Bank.
- Stijn Claessens & Simeon Djankov & Gerhard Pohl, 1997. "Determinants of Performance of Manufacturing Firms in Seven European Transition Economies," William Davidson Institute Working Papers Series 74, William Davidson Institute at the University of Michigan.
- E, S & G, A & S, I, 1995. "Shocks and Adjustment by Firms in Transition: A Comparative Study," Journal of Comparative Economics, Elsevier, vol. 21(2), pages 131-153, October.
- Pohl, G. & Djankov, S. & Anderson, R.E., 1996. "Restructuring Large Industrial Firms in Central and Eastern Europe: An Empirical Analysis," Papers 332, World Bank - Technical Papers.
- Svejnar, Jan, 1996. "Enterprises and Workers in the Transition: Econometric Evidence," American Economic Review, American Economic Association, vol. 86(2), pages 123-127, May.
- Lubomir Lizal & Miroslav Singer & Jan Svejnar, 1996. "Enterprise Restructuring and Performance in the Transition," William Davidson Institute Working Papers Series 13, William Davidson Institute at the University of Michigan.
- Wendy Carlin & John Van Reenen & Toby Wolfe, 1995. "Enterprise restructuring in early transition: the case study evidence from Central and Eastern Europe," The Economics of Transition, The European Bank for Reconstruction and Development, vol. 3(4), pages 427-458, December.
- Brian Pinto & Marek Belka & Stefan Krajewski, 1993. "Transforming State Enterprises in Poland: Evidence on Adjustment by Manufacturing Firms," Brookings Papers on Economic Activity, Economic Studies Program, The Brookings Institution, vol. 24(1), pages 213-270.
- Andrei Shleifer & Robert W. Vishny, 1994. "Politicians and Firms," The Quarterly Journal of Economics, Oxford University Press, vol. 109(4), pages 995-1025. Full references (including those not matched with items on IDEAS)