Ownership and Corporate Control in Poland: Why State Firms Defied the Odds

Brian Pinto and Sweder van Wijnbergen

No 1273, CEPR Discussion Papers from C.E.P.R. Discussion Papers

Abstract: We present evidence of major adjustment efforts in the State sector in Poland well before privatization. Extensive survey evidence is used both to establish this point and to find an answer to the question why managers instigated such reforms in spite of the absence of an effective ownership structure. We find both the government and, importantly, commercial banks, exercised strong governance: the government through its refusal to give open-ended subsidies and a tax-based wage policy, the effectiveness of which we establish using econometric techniques; and the banks through their discretion in allocating new funds. We also show that banks started to discipline their borrowers only after strong governance reforms for the banks themselves were instituted.

Keywords: Corporate Control; Corporate Governance; Privatization; State Enterprises; Transition Economies (search for similar items in EconPapers)
JEL-codes: G32 (search for similar items in EconPapers)
Date: 1995-12
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Citations: View citations in EconPapers (8)

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