The paper is intended to contribute to the microeconomic analysis of transition. Two alternative decision models of the firm are presented. The difference is analysed between the transformation of a state firm into a firm with a dominant private owner and a firm with dispersed private owners....

The author stresses specific features of restructuring under transition of a post-communist economy. He presents a formal model comparing the restructuring of three different firms characterized by ownership under the assumption of imperfect capital and financial markets. The empirical...