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

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  • Patrick Paul Walsh
  • Ciara Whelan

Abstract

Using survey data for 220 traditional manufacturing firms over 7 years of transition and 4 CEE countries, we find firms that produced for the EU market under planning consistently outperform those that produced for the CMEA market. Within the previously CMEA market, the best firms were selected to outside privatisation and outperformed insider/state owned firms. Outside privatisation was resisted in EU oriented firms and ownership was found to have no effect on performance. We argue that insider/state ownership in previously CMEA and EU markets builds up political support for the market system during its initial stages, ensuring its long-term success.

Suggested Citation

  • Patrick Paul Walsh & Ciara Whelan, 2000. "Firm Performance and the Political Economy of Corporate Governance: Survey Evidence for Bulgaria, Hungary, Slovakia and Slovenia," William Davidson Institute Working Papers Series 338, William Davidson Institute at the University of Michigan.
  • Handle: RePEc:wdi:papers:2000-338
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    References listed on IDEAS

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    Cited by:

    1. Bhaumik, Sumon Kumar & Dimova, Ralitza & Nugent, Jeffrey B., 2011. "Off-farm labor supply and labor markets in rapidly changing circumstances: Bulgaria during transition," Economic Systems, Elsevier, vol. 35(3), pages 378-389, September.
    2. Saul Estrin & Alan A. Bevan & Boris Kuznetsov & Mark E. Schaffer & Manuela Angelucci & Julian Fennema & Giovanni Mangiarotti, 2001. "The Determinants of Privatised Enterprise Performance in Russia," William Davidson Institute Working Papers Series 452, William Davidson Institute at the University of Michigan.
    3. Stefan Bojnec & Ana Xavier, 2004. "Entry and exit in transition economies: the Slovenian manufacturing sector," Post-Communist Economies, Taylor & Francis Journals, vol. 16(2), pages 191-214.
    4. Ksenija Dencic-Mihajlov, 2009. "Reforms of Corporate Governance and Takeover Regulation: Evidence from Serbia," South-Eastern Europe Journal of Economics, Association of Economic Universities of South and Eastern Europe and the Black Sea Region, vol. 7(2), pages 205-227.
    5. Marko Simoneti & Joze P. Damijan & Matija Rojec & Boris Majcen, 2004. "Case-by-case versus Mass Privatization in Transition Economies: Owner and Seller Effects on Performance of Firms in Slovenia," LICOS Discussion Papers 14304, LICOS - Centre for Institutions and Economic Performance, KU Leuven.
    6. Faggio, Giulia & Konings, Jozef, 2003. "Job creation, job destruction and employment growth in transition countries in the 90s," Economic Systems, Elsevier, vol. 27(2), pages 129-154, June.
    7. Karen Crabbé & Michel Beine, 2009. "Trade, Institutions and Export Specialization," LICOS Discussion Papers 23409, LICOS - Centre for Institutions and Economic Performance, KU Leuven.
    8. Sergei Guriev & Barry W. Ickes, 2000. "Microeconomic Aspects of Economic Growth in Eastern Europe and the Former Soviet Union, 1950-2000," William Davidson Institute Working Papers Series 348, William Davidson Institute at the University of Michigan.
    9. Bang, James T., 2007. "Determinants of the method of sale in privatization," Economic Systems, Elsevier, vol. 31(3), pages 272-291, September.
    10. Jozef Konings & Patrick Van Cayseele & Frederic Warzynski, 2005. "The Effects of Privatization and Competitive Pressure on Firms' Price-Cost Margins: Micro Evidence from Emerging Economies," The Review of Economics and Statistics, MIT Press, vol. 87(1), pages 124-134, February.
    11. Fiona Burke & Patrick Walsh, 2012. "Regional earning disparities and the speed of transition: evidence from Poland 1994–1997," IZA Journal of Labor & Development, Springer;Forschungsinstitut zur Zukunft der Arbeit GmbH (IZA), vol. 1(1), pages 1-19, December.
    12. Simoneti, Marko & Damijan, Joze P. & Rojec, Matija & Majcen, Boris, 2005. "Case-by-Case Versus mass privatization in transition economies: Initial owner and final seller effects on performance of firms in Slovenia," World Development, Elsevier, vol. 33(10), pages 1603-1625, October.
    13. Jozef Konings & Ana Xavier, 2002. "Firm Growth and Survival in a Transition Country: Micro Evidence from Slovenia," LICOS Discussion Papers 11402, LICOS - Centre for Institutions and Economic Performance, KU Leuven.
    14. Richard B. Goud Jr., 2002. "Ownership and Firm Performance: Evidence from 25 Countries in Central and Eastern Europe and the Former Soviet Union," Development and Comp Systems 0207002, EconWPA.
    15. Andreyeva Tatiana, 2003. "Company Performance in Ukraine: What Governs its Success," EERC Working Paper Series 03-01e, EERC Research Network, Russia and CIS.
    16. Schnytzer, Adi & Andreyeva, Tatiana, 2002. "Company performance in Ukraine: is this a market economy?," Economic Systems, Elsevier, vol. 26(2), pages 83-98, June.

    More about this item

    Keywords

    firm performance; political economy; privatisation and demand shocks;

    JEL classification:

    • P52 - Economic Systems - - Comparative Economic Systems - - - Comparative Studies of Particular Economies

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