Privatization, Ownership Structure, and Firm Performance: New Evidence from the Romanian Experiment

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IZA Seminar

Place: Schaumburg-Lippe-Str. 9, 53113 Bonn

Date: 06.05.2003, 12:15 - 13:30


Presentation by 

Álmos Telegdy (Central European University)


We construct and analyze 1992-2001 panel data the effects of alternative post privatization ownership structures on firm performance and the time profile of firm performance before and after privatization for the surviving population of initially state-owned enterprises in Romania. The data permit us to describe the post-privatization ownership structure and to estimate the effect of Romania's diverse privatization policies on firm performance. Applying OLS and fixed-effects methods to a variety of specifications, we find consistently positive, highly significant effects of private ownership on labor productivity growth, the point estimates implying an additional 1.5 to 1.9 percentage growth for an increase of 10 percent in the private shareholding. The strongest estimated impacts arise from sales to outside foreign and domestic blockholders, but insider transfers and voucher privatization are also estimated to have positive, although much smaller, effects on firm performance.

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