IDEAS home Printed from https://ideas.repec.org/p/wbk/wbrwps/2047.html
   My bibliography  Save this paper

Ownership structure and enterprise restructuring in six newly independent states

Author

Listed:
  • Djankov, Simeon

Abstract

The author investigates the relationship between ownership structure and enterprise restructuring in six newly independent states: Georgia, Kazakstan, the Kyrgyz Republic, Moldova, Russia, and Ukraine. He documents the changing pattern of ownership in 960 privatized manufacturing companies from 1995-97. There are large differences in ownership structure across countries, differences that seem to be determined by the method of privatization pursued. Enterprises in countries where the privatization programs favored incumbent managers (Georgia and Ukraine) ended with heavy ownership by managers (an average 53.6 percent and 46.2 percent respectively). Countries that used mainly the mass privatization approach (Kazakstan and the Kyrgyz Republic had the highest proportion of ownership shares held be outside investors (37 percent and 21.2 percent respectively). Foreign ownership is positively associated with enterprise restructuring at high ownership levels (above 30 percent of shares). By contrast, the relationship between management ownership by outside local investors or the state is not significantly correlated with restructuring.

Suggested Citation

  • Djankov, Simeon, 1999. "Ownership structure and enterprise restructuring in six newly independent states," Policy Research Working Paper Series 2047, The World Bank.
  • Handle: RePEc:wbk:wbrwps:2047
    as

    Download full text from publisher

    File URL: http://www-wds.worldbank.org/external/default/WDSContentServer/WDSP/IB/1999/04/28/000094946_99031911113467/Rendered/PDF/multi_page.pdf
    Download Restriction: no
    ---><---

    Other versions of this item:

    References listed on IDEAS

    as
    1. Michael C. Jensen, 2010. "The Modern Industrial Revolution, Exit, and the Failure of Internal Control Systems," Journal of Applied Corporate Finance, Morgan Stanley, vol. 22(1), pages 43-58, January.
    2. Smith, Stephen C. & Cin, Beom-Cheol & Vodopivec, Milan, 1997. "Privatization Incidence, Ownership Forms, and Firm Performance: Evidence from Slovenia," Journal of Comparative Economics, Elsevier, vol. 25(2), pages 158-179, October.
    3. Megginson, William L & Nash, Robert C & van Randenborgh, Matthias, 1994. "The Financial and Operating Performance of Newly Privatized Firms: An International Empirical Analysis," Journal of Finance, American Finance Association, vol. 49(2), pages 403-452, June.
    4. Richard E Ericson, 1998. "Restructuring in Transition: Conception and Measurement," Comparative Economic Studies, Palgrave Macmillan;Association for Comparative Economic Studies, vol. 40(2), pages 103-108, July.
    5. McConnell, John J. & Servaes, Henri, 1990. "Additional evidence on equity ownership and corporate value," Journal of Financial Economics, Elsevier, vol. 27(2), pages 595-612, October.
    6. Olivier Blanchard & Michael Kremer, 1997. "Disorganization," The Quarterly Journal of Economics, Oxford University Press, vol. 112(4), pages 1091-1126.
    7. Demsetz, Harold & Lehn, Kenneth, 1985. "The Structure of Corporate Ownership: Causes and Consequences," Journal of Political Economy, University of Chicago Press, vol. 93(6), pages 1155-1177, December.
    8. Pohl, G. & Anderson, R.E. & Claessens, S. & Djankov, S., 1997. "Privatization and Restructuring in Central and Eastern Europe: Evidence and Policy Options," Papers 368, World Bank - Technical Papers.
    9. Pinto, Brian & Belka, Marek & Krajewski, Stefan, 1993. "Transforming state enterprises in Poland : macroeconomic evidence on adjustment," Policy Research Working Paper Series 1101, The World Bank.
    10. Friend, Irwin & Lang, Larry H P, 1988. " An Empirical Test of the Impact of Managerial Self-interest on Corporate Capital Structure," Journal of Finance, American Finance Association, vol. 43(2), pages 271-281, June.
    11. Barberis, Nicholas & Maxim Boycko & Andrei Shleifer & Natalia Tsukanova, 1996. "How Does Privatization Work? Evidence from the Russian Shops," Journal of Political Economy, University of Chicago Press, vol. 104(4), pages 764-790, August.
    12. Andrei Shleifer & Robert W. Vishny, 1994. "Politicians and Firms," The Quarterly Journal of Economics, Oxford University Press, vol. 109(4), pages 995-1025.
    13. Susan J Linz & Gary Krueger, 1998. "Enterprise Restructuring in Russia's Transition Economy: Formal and Informal Mechanisms," Comparative Economic Studies, Palgrave Macmillan;Association for Comparative Economic Studies, vol. 40(2), pages 5-52, July.
    14. Shleifer, Andrei & Vishny, Robert W, 1986. "Large Shareholders and Corporate Control," Journal of Political Economy, University of Chicago Press, vol. 94(3), pages 461-488, June.
    15. Morck, Randall & Shleifer, Andrei & Vishny, Robert W., 1988. "Management ownership and market valuation," Scholarly Articles 29407535, Harvard University Department of Economics.
    16. Roll, Richard, 1986. "The Hubris Hypothesis of Corporate Takeovers," The Journal of Business, University of Chicago Press, vol. 59(2), pages 197-216, April.
    17. Frydman, Roman & Gray, Cheryl & Hessel, Marek & Rapaczynski, Andrzej, 1997. "Private Ownership and Corporate Performance: Some Lessons from Transition Economies," Working Papers 97-28, C.V. Starr Center for Applied Economics, New York University.
    18. Frydman, Roman & Gray, Cheryl W. & Hessel, Marek & Rapaczynski, Andrzej, 1997. "Private ownership and corporate performance : some lessons from transition economies," Policy Research Working Paper Series 1830, The World Bank.
    19. Morck, Randall & Shleifer, Andrei & Vishny, Robert W., 1988. "Management ownership and market valuation : An empirical analysis," Journal of Financial Economics, Elsevier, vol. 20(1-2), pages 293-315, January.
    20. Malatesta, Paul H. & Walkling, Ralph A., 1988. "Poison pill securities : Stockholder wealth, profitability, and ownership structure," Journal of Financial Economics, Elsevier, vol. 20(1-2), pages 347-376, January.
    21. Wendy Carlin & John Van Reenen & Toby Wolfe, 1995. "Enterprise restructuring in early transition: the case study evidence from Central and Eastern Europe1," The Economics of Transition, The European Bank for Reconstruction and Development, vol. 3(4), pages 427-458, December.
    22. 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.
    23. Ralph A. Walkling & Michael S. Long, 1984. "Agency Theory, Managerial Welfare, and Takeover Bid Resistance," RAND Journal of Economics, The RAND Corporation, vol. 15(1), pages 54-68, Spring.
    24. Earle, John S & Estrin, Saul, 1997. "After Voucher Privatization: The Structure of Corporate Ownership in Russian Manufacturing Industry," CEPR Discussion Papers 1736, C.E.P.R. Discussion Papers.
    Full references (including those not matched with items on IDEAS)

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Barbara Blaszczyk & Iraj Hashi & Alexander Radygin & Richard Woodward, 2003. "Corporate Governance and Ownership Structure in the Transition: The Current State of Knowledge and Where to Go from Here," CASE Network Studies and Analyses 0264, CASE-Center for Social and Economic Research.
    2. Frydman, Roman & Gray, Cheryl & Hessel, Marek P. & Rapaczynski, Andrzej, 1998. "When Does Privatization Work? The Impact of Private Ownership on Corporate Performance in the Transition Economies," Working Papers 98-32, C.V. Starr Center for Applied Economics, New York University.
    3. Simeon Djankov & Stijn Claessens, 1997. "Enterprise Performance and Managers' Profiles," William Davidson Institute Working Papers Series 115, William Davidson Institute at the University of Michigan.
    4. Schnytzer, Adi & Andreyeva, Tatiana, 2002. "Company performance in Ukraine: is this a market economy?," Economic Systems, Elsevier, vol. 26(2), pages 83-98, June.
    5. Djankov, Simeon, 1999. "Restructuring of insider-dominated firms," Policy Research Working Paper Series 2046, The World Bank.
    6. Harper, Joel T., 2002. "The performance of privatized firms in the Czech Republic," Journal of Banking & Finance, Elsevier, vol. 26(4), pages 621-649, April.
    7. Konstantin Gluschenko, 2004. "Analysing changes in market integration through a cross-sectional test for the law of one price," International Journal of Finance & Economics, John Wiley & Sons, Ltd., vol. 9(2), pages 135-149.
    8. Kouznetsov Pavel & Muravyev Alexander, 2001. "Ownership Structure and Firm Performance in Russia: The Case of Blue Chips of the Stock Market," EERC Working Paper Series 01-10e, EERC Research Network, Russia and CIS.
    9. Irina Akimova & Gerhard Schwödiauer, 1999. "Restructuring of Ukrainian Enterprises after Privatization: Does Ownership Structure Matter?," Industrial Organization 9903003, University Library of Munich, Germany.
    10. Timofeev Andrey, 2002. "Fiscal Decentralization and Soft Budget Constraints," EERC Working Paper Series 01-12e, EERC Research Network, Russia and CIS.
    11. Yu, Wusheng & Jensen, Trine Vig, 2003. "Trade Preferences, WTO Negotiations and the LDCs: the case of the "Everything But Arms" Initiative," Conference papers 331124, Purdue University, Center for Global Trade Analysis, Global Trade Analysis Project.
    12. 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.
    13. John S. Earle, 1999. "Post-Privatisation Ownership Structure and Productivity in Russian Industrial Enterprises," Working Papers 1999.19, Fondazione Eni Enrico Mattei.
    14. Andreyeva Tatiana, 2003. "Company Performance in Ukraine: What Governs its Success," EERC Working Paper Series 03-01e, EERC Research Network, Russia and CIS.
    15. Khosa,Amrinder & Ahmed,Kamran & Henry,Darren, 2019. "Ownership Structure, Related Party Transactions, and Firm Valuation," Cambridge Books, Cambridge University Press, number 9781108492195, October.
    16. Marko Simoneti & Aleksandra Gregoric, 2004. "Managerial ownership and corporate performance in Slovenian post-privatisation period," European Journal of Comparative Economics, Cattaneo University (LIUC), vol. 1(2), pages 217-241, December.
    17. Frydman, R. & Hessel, M. & Rapaczynski, A., 2000. "Why Ownership Matters? Entrepreneurship and the Restructuring of Enterprises in Central Europe," Working Papers 00-03, C.V. Starr Center for Applied Economics, New York University.
    18. Alan Bevan & Saul Estrin & Mark E. Schaffer, 1999. "Determinants of Enterprise Performance during Transition," CERT Discussion Papers 9903, Centre for Economic Reform and Transformation, Heriot Watt University.
    19. Frydman, R. & Hessel, M. & Rapaczynski, A., 1998. "Why Ownership Matters?: Politicization and Entrepreneurship in the Restructuring of Enterprises in Central Europe," Working Papers 98-14, C.V. Starr Center for Applied Economics, New York University.
    20. Ratnam Vijayakumaran, 2019. "Agency Costs, Ownership, and Internal Governance Mechanisms: Evidence from Chinese Listed Companies," Asian Economic and Financial Review, Asian Economic and Social Society, vol. 9(1), pages 133-154, January.

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:wbk:wbrwps:2047. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Roula I. Yazigi (email available below). General contact details of provider: https://edirc.repec.org/data/dvewbus.html .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.