Investment, Wages and Ownership During the Transition to a Market Economy: Evidence from Slovenian Firms

, and Jan Svejnar

No 4144, CEPR Discussion Papers from C.E.P.R. Discussion Papers

Abstract: Given the concern about restructuring and the role of insiders during the transition, we analyse the determinants of (and trade-off between) investment and wages in Slovenian firms. We find that investment behaviour is more consistent with the imperfect capital market (internal funds) hypothesis than with the neoclassical or accelerator models. Firms also display a trade-off between investment and wages, and workers share in firms’ surplus and appropriate funds that are supposed to be used for depreciation investment. Most findings are consistent with the principal theoretical models of restructuring. The models, however, underestimate the power of (elite) managers to restrain worker demands and overestimate this power on the part of external owners.

Keywords: investment; Wages; Restructuring; Ownership (search for similar items in EconPapers)
JEL-codes: C33 D92 J50 P20 (search for similar items in EconPapers)
Date: 2003-12
New Economics Papers: this item is included in nep-mfd and nep-tra
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Citations: View citations in EconPapers (4)

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Related works:
Working Paper: Investment Wages and Ownership During the Transition to a Market Economy: Evidence from Slovenian Firms (1998)
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