Restructuring of firms in transition: ownership, institutions and openness to trade

Polona Domadenik, Janez Prašnikar and Jan Svejnar
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Polona Domadenik: Faculty of Economics and Institute for South-East Europe, University of Ljubljana, Slovenia
Janez Prašnikar: Faculty of Economics and Institute for South-East Europe, University of Ljubljana, Slovenia

Journal of International Business Studies, 2008, vol. 39, issue 4, 725-746

Abstract: We develop a theoretical framework for defensive and strategic restructuring, and provide estimates of restructuring in privatized firms in an advanced transition economy: Slovenia. Our rich data point to both types of restructuring, as well credit rationing and bargaining with respect to investment. Privatized firms display profit-maximizing behavior, and a firm's export orientation and institutional features, such as insider vs outsider privatization, employee ownership, and employee control, do not affect the firm's employment and investment behavior. The results suggest that a major exposure to world competition induces similar economic behavior in firms with different structural and institutional characteristics. Journal of International Business Studies (2008) 39, 725–746. doi:10.1057/palgrave.jibs.8400379

Date: 2008
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