Enterprises in the Post-Privatization Period

Abstract

Most empirical studies in recent times have examined the effects of privatization and new ownership structures on enterprise performance in transition economies. Although the initial expectation was very optimistic, the empirical evidence does not confirm the hypothesis that enterprises in transition countries perform better after privatization (Earle and Estrin 1996; Konings 1998; Jones and Mygind 1998). Konings (1998) emphasizes that the unexpectedly worse performance of the privatized firms could be the result of the new ownership structure formed after the mass distribution of vouchers. Insiders, workers and managers' were then able to block the process of restructuring, which, in its first phase, is characterized mainly by the downsizing of loss-making activities and associated redundancies. Many authors present managers as being skillful in protecting themselves against pressures for change while resisting innovative changes and the restructuring of their firm's activities. How-