Click here for search results
Politicians and firms in seven central and eastern European countries, Volume 1
 
Author:Claessens, Stijn; Djankov, Simeon; Country:Slovak Republic; Slovenia; Poland; Czech Republic; Romania; Bulgaria; Hungary;
Date Stored:2001/05/14Document Date:1998/08/31
Document Type:Policy Research Working PaperSubTopics:Environmental Economics & Policies; Economic Theory & Research; Financial Crisis Management & Restructuring; Banks & Banking Reform; Municipal Financial Management
Language:EnglishMajor Sector:(Historic)Private Sector Development
Region:Europe and Central AsiaReport Number:WPS1954
Sub Sectors:Business EnvironmentCollection Title:Policy, Research working paper ; no. WPS 1954
Volume No:1  

Summary: The authors test several propositions derived by Shleifer and Vishny (1994, 1996) about how privatization and stabilization (hard budget constraints) affect enterprise behavior. They document the changes in financing, employment, and operating efficiency that have occurred in more than 6300 manufacturing enterprises in seven Central and Eastern European countries (Bulgaria, Czech Republic, Hungary, Poland, Romania, Slovak Republic, and Slovenia). They then compare the relative performance of privatized and state-owned enterprises. Controlling for institutional differences and the endogeneity of privatization choices, they find that privatization is associated with significant improvements in total factor productivity and reductions in employment. Reductions in soft financing are associated with further productivity gains. State-owned enterprises employ more workers, have lower productivity, receive more financing and direct subsidies, and have higher variable costs than privatized firms, particularly firms privatized for more than three years. Privatized firms also consistently outperform state enterprises in productivity growth. Over time, the role of politicians in allocating bank financing and subsidies appears to have declined, however, and banks have played a greater role in (efficiently) allocating resources. And the institutional environment appears to have improved in most countries, suggesting that the influence of corruption has declined over time. The results--which provide significant support for the Shleifer-Vishny model--demonstrate the beneficial effects of privatization in the presence of stabilization and decreasing corruption.

Official Documents
Official, scanned versions of documents (may include signatures, etc.)
File TypeDescriptionFile Size (mb)
PDF 35 pagesOfficial version*2.45 (approx.)
TextText version**
How To Order
Light-Weight Documents
Lighter (less MB) documents which may or may not be the final, official version
File TypeDescriptionFile Size (mb)
PDF 31 pagesWPS19540.10

* The official version is derived from scanning the final, paper copy of the document and is the official,
archived version including all signatures, charts, etc.
** The text version is the OCR text of the final scanned version and is not an accurate representation of the final text.
It is provided solely to benefit users with slow connectivity.



Permanent URL for this page: http://go.worldbank.org/Y00698GYP0