Channels of Restructuring in Privatized Czech Companies

31 Pages Posted: 3 Apr 2007

See all articles by Jana P. Fidrmuc

Jana P. Fidrmuc

Warwick Business School - Finance Group

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The main contribution of this paper to the literature on restructuring in the transition economies of Central and Eastern Europe is the analysis of productivity-growth effects for different channels of restructuring. It examines a panel of 737 voucher-privatized Czech companies in the first years after the transfer of ownership (between 1993 and 1998). The results indicate that asset sales and employee incentives serve as restructuring channels through which productivity of the privatized companies increases. The analysis also indicates that capital expenditures, labour shedding and CEO replacements are not significantly correlated to productivity growth. Furthermore, the analysis suggests that the availability of bank loans is positively associated with productivity growth, but not for less profitable firms. This provides some evidence in support of soft budget constraints accommodated via bank lending.

Suggested Citation

Fidrmuc, Jana P., Channels of Restructuring in Privatized Czech Companies. Economics of Transition, Vol. 15, No. 2, pp. 309-339, April 2007, Available at SSRN: or

Jana P. Fidrmuc (Contact Author)

Warwick Business School - Finance Group ( email )

Warwick Business School
Coventry CV4 7AL
United Kingdom

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