Firm performance and the political economy of corporate governance: survey evidence for Bulgaria, Hungary, Slovakia and Slovenia

Using survey data for 220 traditional manufacturing firms over 7 years of transition and 4 Central Eastern Europe (CEE) countries, we find firms that produced for the EU market under planning consistently outperform those that produced for the CMEA market. Within the previously CMEA market, the best...

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Bibliographic Details
Published in:Economic systems 2001-06, Vol.25 (2), p.85-112
Main Authors: Walsh, Patrick Paul, Whelan, Ciara
Format: Article
Language:English
Subjects:
Firm performance
Political economy
Privatisation and demand shocks
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Summary:Using survey data for 220 traditional manufacturing firms over 7 years of transition and 4 Central Eastern Europe (CEE) countries, we find firms that produced for the EU market under planning consistently outperform those that produced for the CMEA market. Within the previously CMEA market, the best firms were selected to outside privatisation and outperformed insider/state owned firms. Outside privatisation was resisted in EU oriented firms and ownership was found to have no effect on performance. Path dependent demand shocks and political constraints on the sequencing of state firms to private ownership determine the relationship between firm performance and ownership structure during transition.
ISSN:0939-3625
1878-5433
DOI:10.1016/S0939-3625(01)00011-5