Channels of restructuring in privatized Czech companies1

The main contribution of this paper to the literature on restructuring in the transition economies of Central and Eastern Europe is the analysis of productivity‐growth effects for different channels of restructuring. It examines a panel of 737 voucher‐privatized Czech companies in the first years af...

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Bibliographic Details
Published in:The economics of transition 2007-04, Vol.15 (2), p.309-339
Main Author: Fidrmuc, Jana P.
Format: Article
Language:English
Subjects:
G30
G34
P31
privatization
Productivity
restructuring
transition
Transition economies
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Summary:The main contribution of this paper to the literature on restructuring in the transition economies of Central and Eastern Europe is the analysis of productivity‐growth effects for different channels of restructuring. It examines a panel of 737 voucher‐privatized Czech companies in the first years after the transfer of ownership (between 1993 and 1998). The results indicate that asset sales and employee incentives serve as restructuring channels through which productivity of the privatized companies increases. The analysis also indicates that capital expenditures, labour shedding and CEO replacements are not significantly correlated to productivity growth. Furthermore, the analysis suggests that the availability of bank loans is positively associated with productivity growth, but not for less profitable firms. This provides some evidence in support of soft budget constraints accommodated via bank lending.
ISSN:0967-0750
2577-6975
1468-0351
2577-6983
DOI:10.1111/j.1468-0351.2007.00287.x