Privatization and Restructuring in Central and Eastern Europe: Evidence and Policy Options

42 Pages Posted: 23 Oct 1997

See all articles by Gerhard Pohl

Gerhard Pohl

World Bank

Robert E. Anderson

affiliation not provided to SSRN

Stijn Claessens

Bank for International Settlements (BIS)

Simeon Djankov

London School of Economics & Political Science (LSE); Peter G. Peterson Institute for International Economics

Date Written: May 1997

Abstract

In this paper, we analyze financial and operating data (1992 to 1995) for more than 6,300 industrial firms in seven countries of the region: Bulgaria, Czech Republic, Hungary, Poland, Romania, Slovak Republic and Slovenia. These countries have adopted different policies to encourage enterprise restructuring; thus the data can suggest which policies have been the most successful. Fast privatization is instrumental in encouraging restructuring. On average, a firm that has been privatized for four years will increase its productivity 3-5 times more than a similar firm that is still in state ownership. Less important is the method of privatization. Although case-by-case privatization might result in more foreign ownership, investment, and technical assistance, it is slower to implement and does not necessarily bring more rapid restructuring. This is fortunate because such assistance is likely to be available for only a few firms even in those countries that emphasize case-by-case privatization.

JEL Classification: L33

Suggested Citation

Pohl, Gerhard and Anderson, Robert E. and Claessens, Stijn and Djankov, Simeon, Privatization and Restructuring in Central and Eastern Europe: Evidence and Policy Options (May 1997). World Bank Technical Paper No. 368. Available at SSRN: https://ssrn.com/abstract=37369 or http://dx.doi.org/10.2139/ssrn.37369

Gerhard Pohl

World Bank ( email )

1818 H Street, N.W.
Financial Sector Development
Washington, DC 20433
United States
202-473-2979 (Phone)
202-522-0005 (Fax)

Robert E. Anderson

affiliation not provided to SSRN

Stijn Claessens

Bank for International Settlements (BIS) ( email )

Centralbahnplatz 2
CH-4002 Basel
Switzerland

Simeon Djankov (Contact Author)

London School of Economics & Political Science (LSE) ( email )

Houghton Street
London, WC2A 2AE
United Kingdom

Peter G. Peterson Institute for International Economics ( email )

1750 Massachusetts Avenue, NW
Washington, DC 20036
United States

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