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Continuity under a different name: The outcome of privatisation in Serbia

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  • Ivanovic, Vladan
  • Kufenko, Vadim
  • Begovic, Boris
  • Stanisic, Nenad
  • Geloso, Vincent

Abstract

Normally, privatisation is seen as beneficial. In the case of Serbia, the results are disappointing. This paper considers the failure of privatisation in Serbia - a latecomer in the matter - where privatisation was partly a result of exogenous pressures. In Serbia, a sizeable number of privatised firms were bought by bureaucrats and politicians and all firms were subjected to a period of supervision. We argue that this process of privatisation was designed to allow rentseekers to conserve their privileges through asset stripping and that this explains the failure. In order to do so, we perform empirical analysis of the determinants of liquidation, merger and bankruptcy of privatised firms from 2002 to 2015. We construct a novel data set from primary sources, free of the 'survivorship bias' and containing proxies for various types of owners, indirect signs of asset stripping strategy and a broad range of controls. Our results indicate that firms owned by politicians face significantly higher risks of bankruptcy, especially after the end of supervision.

Suggested Citation

  • Ivanovic, Vladan & Kufenko, Vadim & Begovic, Boris & Stanisic, Nenad & Geloso, Vincent, 2016. "Continuity under a different name: The outcome of privatisation in Serbia," Hohenheim Discussion Papers in Business, Economics and Social Sciences 10-2016, University of Hohenheim, Faculty of Business, Economics and Social Sciences.
    • Handle: RePEc:zbw:hohdps:102016
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    Cited by:

    1. Lidia Ceriani & Simona Scabrosetti & Francesco Scervini, 2022. "Inequality, Privatization and Democratic Institutions in Developing Countries," Hacienda Pública Española / Review of Public Economics, IEF, vol. 240(1), pages 95-124, March.
    2. Will Bartlett, 2023. "The performance of politically connected firms in South East Europe: state capture or business capture?," Post-Communist Economies, Taylor & Francis Journals, vol. 35(4), pages 351-367, May.
    3. Ivanović, Vladan & Kufenko, Vadim, 2020. "It's a man's world? The rise of female entrepreneurship during privatization in Serbia," Hohenheim Discussion Papers in Business, Economics and Social Sciences 07-2020, University of Hohenheim, Faculty of Business, Economics and Social Sciences.
    4. Finn Tarp & Sam Jones & Felix Schilling, 2021. "Doing business while holding public office: Evidence from Mozambique’s firm registry," DERG working paper series 21-08, University of Copenhagen. Department of Economics. Development Economics Research Group (DERG).
    5. Geloso, Vincent & Kufenko, Vadim & Arsenault-Morin, Alex P., 2023. "The lesser shades of labor coercion: The impact of seigneurial tenure in nineteenth-century Quebec," Journal of Development Economics, Elsevier, vol. 163(C).
    6. Ivanović, Vladan & Kufenko, Vadim, 2023. "It's a man's world? The rise of female entrepreneurship during privatization in Serbia," Economic Systems, Elsevier, vol. 47(3).

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    Keywords

    privatisation; asset stripping; logistic regression; survival analysis;
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