We present a theory for the puzzling issue regarding why certain firms in financial distress, prefer a costlier formal …

This paper analyzes decisions of managers on restructuring before privatization. After privatization, the new owner …-restructuring effect of privatization caused by manager's uncertainty on after-privatization future. Whereas the latter set of equilibria …

This study of how privatization and stabilization (hard budget constraints) affect enterprise behavior shows that … propositions derived by Shleifer and Vishny (1994, 1996) about how privatization and stabilization (hard budget constraints) affect …-owned enterprises. Controlling for institutional differences and the endogeneity of privatization choices, they find that privatization …

This paper analyzes decisions of managers on restructuring before privatization. After privatization, the new owner …-restructuring effect of privatization caused by manager's uncertainty on after-privatization future. Under the assumption that the new …

under the socialist economy, even under reforms coming short of privatization. The introduction of a managerial labour … market, through privatization, introduces competition for managers and eliminates the ratchet effect, thereby inducing … managers to restructure. Prospects of privatization also provide incentives to restructure even when managerial skills are …