Restructuring in the Czech Republic: Beyond Ownership and Bankruptcy
CERGE-EI Working Paper Series No. 66
38 Pages Posted: 20 Feb 2010
Date Written: May 1, 1995
Abstract
Restructuring of large industrial holdings in the Czech Republic (S-firms) depends on probes into new markets. The development and financing of probes generates internal holdups and stalemates among the government, banks and S-firms. The government tries to preserve the value of just-privatized S-firms while avoiding subsidies; banks, facing their delinquency, cannot force bankruptcy since keeping them as clients is as important as maintaining capital adequacy. A compromise arises, IMBR (intricate monitoring based restructuring), where the outside parties condition their involvement on a peculiar reorganization of the firm. We provide the empirical and theoretical underpinnings of IMBR, the emergence of which is neither deliberate nor accidental.
Keywords: Restructuring, Privatization, Incomplete Contracts, Monitoring
Suggested Citation: Suggested Citation
Do you have a job opening that you would like to promote on SSRN?
Recommended Papers
-
A Team Production Theory of Corporate Law
By Margaret M. Blair and Lynn A. Stout
-
Norms and the Theory of the Firm
By Oliver Hart
-
Norms and the Theory of the Firm
By Oliver Hart
-
The Essential Role of Organizational Law
By Henry Hansmann and Reinier Kraakman
-
Direct and Indirect Bargaining Costs and the Scope of the Firm
By Marc Knez and Duncan Simester
-
The Logic of Reciprocity: Trust, Collective Action, and Law
By Dan M. Kahan
-
A New Institutional Economics Approach to Contracts and Cooperatives
By Michael E. Sykuta and Michael L. Cook