Does Privatization Raise Productivity? Evidence from Comprehensive Panel Data on Manufacturing Firms in Hungary, Romania, Russia, and Ukraine
W.E. Upjohn Institute Staff Working Paper No. 04-107
52 Pages Posted: 29 Dec 2004
There are 2 versions of this paper
Does Privatization Raise Productivity? Evidence from Comprehensive Panel Data on Manufacturing Firms in Hungary, Romania, Russia, and Ukraine
Does Privatization Raise Productivity? Evidence from Comprehensive Panel Data on Manufacturing Firms in Hungary, Romania, Russia and Ukraine
Date Written: November 2004
Abstract
We analyze the impact of privatization on multifactor productivity (MFP) using long panel data for nearly the universe of initially state-owned manufacturing firms in four economies. Controlling for firm and industry-year fixed effects and employing a wide variety of measurement approaches, we estimate that majority privatization raises MFP about 28 percent in Romania, 22 percent in Hungary, and 3 percent in Ukraine, with some variation across specifications, while in Russia it lowers it about 4 percent. Privatization to foreign rather than domestic investors has a larger impact (about 44 percent) and is much more consistent across countries. The positive effects emerge within a year in Hungary, Romania, and Ukraine and continue to grow thereafter, but are still ambiguous even after 5 years in Russia. Pre-privatization MFP exceeds that of firms remaining state-owned in all countries, implying that cross-sectional estimates overstate privatization effects. The patterns of the estimated effects cast doubt on a number of explanations for "when privatization works."
Keywords: Privatization, productivity, foreign ownership, Hungary, Romania, Russia, Ukraine, transition
JEL Classification: D24, G34, L33, P31
Suggested Citation: Suggested Citation
Do you have negative results from your research you’d like to share?
Recommended Papers
-
From State to Market: A Survey of Empirical Studies on Privatization
-
Enterprise Restructuring in Transition: A Quantitative Survey
By Simeon Djankov and Peter Murrell
-
Enterprise Restructuring in Transition: A Quantitative Survey
By Simeon Djankov and Peter Murrell
-
Russian Privatization and Corporate Governance: What Went Wrong?
By Bernard S. Black, Reinier Kraakman, ...
-
How Does Privatization Work? Evidence from the Russian Shops
By Nicholas Barberis, Maxim Boycko, ...
-
By Joseph P. H. Fan and T.j. Wong
-
By Enrico C. Perotti and Bruno Biais