Ownership and Productive Efficiency: Evidence from Estonia

Derek Jones and Niels Mygind

No 385, William Davidson Institute Working Papers Series from William Davidson Institute at the University of Michigan

Abstract: Privatization in Estonia has produced varied ownership configurations. This enables hypotheses on the productivity effects of different ownership forms to be tested. Findings are based on fixed effects production function models and are estimated using a large, random sample of firms. Depending on the particular specification (and relative to state ownership) we find that: i) private ownership is 13-22% more efficient; (ii) all types of private ownership are more productive, though managerial ownership has the biggest effects (21-32%) and ownership by domestic outsiders has the smallest impact (0-15%). The joint hypothesis that privatization coefficients are equal is rejected. Findings are robust with respect to choice of technology and the use of instrumental variable estimates. These results provide only partial support for the standard theory of privatization and stronger support for theorists who argue that some forms of insider ownership may constitute preferable forms of corporate goverance in some circumstances.

JEL-codes: G34 O12 P2 (search for similar items in EconPapers)
Pages: pages
Date: 2001-07-01
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Citations: View citations in EconPapers (7)

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Journal Article: Ownership and Productive Efficiency: Evidence from Estonia (2002)
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