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The Determinants of Asset Stripping: Theory and Evidence from the Transition Economies

Nauro Campos () and Francesco Giovannoni

No 1867, IZA Discussion Papers from Institute of Labor Economics (IZA)

Abstract: During the transition from plan to market, managers and politicians succeeded in maintaining control of large parts of the stock of socialist physical capital. Despite the obvious importance of this phenomenon, there have been no efforts to model, measure and investigate this process empirically. This paper tries to fill this gap by putting forward theory and econometric evidence. We argue that asset stripping is driven by the interplay between the firm's potential profitability and its ability to influence law enforcement. Our econometric results, for about 950 firms in five transition economies, provide support for this argument.

Keywords: corruption; law enforcement; asset stripping; transition (search for similar items in EconPapers)
JEL-codes: H82 K42 O17 P26 P31 (search for similar items in EconPapers)
Pages: 42 pages
Date: 2005-11
New Economics Papers: this item is included in nep-law, nep-pbe and nep-tra
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Published in: Journal of Law and Economics, 2006, 49 (2), 681-706

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Journal Article: The Determinants of Asset Stripping: Theory and Evidence from the Transition Economies (2006) Downloads
Working Paper: The Determinants of Asset Stripping: Theory and Evidence from the Transition Economies (2005) Downloads
Working Paper: The Determinants of Asset Stripping: Theory and Evidence From the Transition Economies (2005) Downloads
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