The Impact of Czech Privatisation Methods on Enterprise Performance Incorporating Initial Selection Bias Correction

20 Pages Posted: 1 Jul 1997

See all articles by Anton Marcincein

Anton Marcincein

Center for the Protection of Human Rights (CPHR) - LSE

Sweder van Wijnbergen

Universiteit van Amsterdam; Tinbergen Institute; Centre for Economic Policy Research (CEPR); National Bureau of Economic Research (NBER)

Date Written: February 1997

Abstract

Governments with transitional economies have applied different privatisation methods, from an almost free distribution to the direct sales of state assets. While a free distribution was believed to ensure the political feasibility of the program and its fairness, direct sales, or more generally, standard privatisation methods had a significant advantage in creating concentrated ownership structures as the prerequisite to corporate control and restructuring. Many economists believe that the two goals of mass privatisation, political feasibility and creation of proper ownership incentives, contradict each other and recent empirical comparisons of enterprises seem to support their view. However, all empirical works have been based on the weak assumption that privatisation methods were applied on a randomly selected samples of enterprises, which then allowed for a direct comparison between these enterprises. Our main claim is that governments indeed selected enterprises non-randomly and therefore, the resulting selection bias must be incorporated into the analyses. To show this, we apply a Heckman two-step regression method on a sample of 559 Czech enterprises. The main point of this paper then is that performance is influenced by the selection process and combination of vouchers with outsider owners is preferred over 100% voucherisation.

JEL Classification: L33, P50

Suggested Citation

Marcincein, Anton and van Wijnbergen, Sweder, The Impact of Czech Privatisation Methods on Enterprise Performance Incorporating Initial Selection Bias Correction (February 1997). Available at SSRN: https://ssrn.com/abstract=18606 or http://dx.doi.org/10.2139/ssrn.18606

Anton Marcincein (Contact Author)

Center for the Protection of Human Rights (CPHR) - LSE ( email )

Oktobrova 65, 08001 Presov
Bratislava
Slovak Republic
+421 91 46874 (Phone)
+421 91 46874 (Fax)

Sweder Van Wijnbergen

Universiteit van Amsterdam ( email )

Roetersstraat 11
Amsterdam, 1018 WB
Netherlands
+31 20 525 4011 / 4203 (Phone)
+31-35-624 91 82 (Fax)

Tinbergen Institute

Burg. Oudlaan 50
Rotterdam, 3062 PA
Netherlands

Centre for Economic Policy Research (CEPR)

London
United Kingdom

National Bureau of Economic Research (NBER) ( email )

1050 Massachusetts Avenue
Cambridge, MA 02138
United States

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