This paper studies insider privatization in transition economies. We show theoretically that the underperformance of … insider-privatized firms could be due to the manager-cum-owner's lack of incentives after privatization. A screening theory … privatization; in contrast, heavily discounted firms perform indistinguishably from government-owned firms …

This paper studies insider privatization in rural China and provides an explanation of why some firms have performed … well after privatization but others have not. We show theoretically that the underperformance of insider-privatized firms … could be due to the manager-cum-owner's lack of incentives after privatization. A screening theory predicts that the buyout …