The privatization process in Eastern Europe is not irreversible. Future governments may want to (partially) expropriate successful private firms in order to subsidize unsuccessful ones. We use a simple median voter model to predict the policy of future governments. It is shown that there will be...

Using its control of regulated inputs, a government agency extracts rents from a manager who undertakes an investment. Such government rent-seeking activity leads to a typical hold-up problem. Government ownership serves as a second-best commitment mechanism, through which the government agency...

This paper examines the importance of competition in the growth and development of firms. We make use of the large-scale natural experiment of the shift from an economic system without competition to a market economy to shed light on the factors that influence innovation by firms and their...

According to leading economic theorists, creating capitalism out of communism requires rapid privatization. In this article we empirically test the welfare implications of privatization policies in Post-Soviet countries by using cross-national panel mortality data as an indicator of social...

It has long been argued that private ownership of firms leads to better firm performance. However, theory as well as empirical evidence suggest that factors like agency problems may not allow privately owned firms to operate more efficiently or perform better that state owned firms. At the same...

Post-privatization restructuring of former state-owned enterprises (FSOEs) encompasses both shorter-run "defensive" actions and longer-run "strategic" measures. Restructuring involves changes in corporate governance, organizational structure, management, labor, capital, technology, output, and...

This paper uses a unique representative firm level data set to analyse the effect of domestic and international competitive pressure and ownership changes in three emerging economies, Bulgaria Poland and Romania. Our main findings can be summarized as follows: Domestic competitive pressure,...

We examine financial constraints and forms of finance used for investment, by analysing survey data on 157 large privatised companies in Hungary and Poland for the period 1998 – 2000. The Bayesian analysis using Gibbs sampling is carried out to obtain inferences about the sample companies’...

Using firm-level data from Bulgaria and Romania, this paper addresses a lacuna in the transition literature, namely, the link of firm-level employment turnover with firm-level growth in labour productivity. The results suggest that while net job creation at the firm level was affected by...