This study summarizes the economic and political developments relating to privatization, state capitalism, and state ownership of business since 2000 and then surveys the extensive recent research examining these issues empirically. Through the early 21st century, there was an unambiguous global trend towards reducing government ownership of business enterprise, but this trend has since at least been slowed, and perhaps even reversed. We discuss the factors that have promoted a global resurgence of state ownership, then define and analyze the new ideology labeled “state capitalism.” Recent research examines whether privatization improves the operating and financial performance of divested companies, as well as when, where and how governments decide to privatize individual companies and how these sales are priced. All the performance studies surveyed document significant improvements after companies are divested. Recent academic and professional research categorizes and evaluates various types of state owners; examines determinants of the level of state ownership; studies how state ownership impacts the valuation of corporate assets and examines the relative efficiency of state versus private ownership; and assesses how state ownership impacts corporate financial policies, especially capital investment. This research highlights that different types of state owners have very different impacts on corporate value and performance, and that state ownership generally has a significant, and mostly pernicious, impact on corporate investment and financial policies. The separate effect of state ownership on corporate valuation is less clear-cut. This survey also summarizes recent empirical research examining the relationship between state ownership of business assets and financial markets and institutions, and also surveys the literature examining political connections between politicians and corporate managers. Sovereign wealth fund research yields essentially benign findings, but almost all studies examining state-owned banking show that state ownership reduces banks’ efficiency. All the financial markets and institutions studies examined highlight the distortive effects and economic costs of bailouts and guarantees, and almost all the political connections studies find that these connections are privately beneficial but socially costly. Finally, the research surveyed here convinces the author that “state capitalism” is an essentially failed model.

Privatization, State Capitalism, and State Ownership of Business in the 21st Century

pdf/industrial-clusters-in-russia-the-development-of-special-54zd3pj0xu.pdf

Industrial clusters in Russia: The development of special economic zones and industrial parks

Purpose – To explain the factors of benchmarking adoption as experienced by companies in Malaysia in which benchmarking is one of the way to create a sense of urgency by telling them where they are, how good they have to be, and what they have to do to get there.Design/methodology/approach – Discriminant analysis was used to determine whether statistically significant differences exist between the average score profile on a set of variables for two a priori defined groups and so enabled them to be classified. Besides, it could help to determine which of the independent variables account the most for the differences in the average score profiles of the two groups. In this study, discriminant analysis was the main instrument to classify the benchmarking adopter and non‐adopter. It was also utilized to determine which of the independent variables would contribute to benchmarking adoption.Findings – The finding from discriminant analysis revealed that employee participation was the most influential factors on...

Understanding factors for benchmarking adoption: New evidence from Malaysia

This paper aims to perform a large-scale meta-analysis of the relationship between post-privatization ownership and firm performance in Central and Eastern Europe and the former Soviet Union. Baseline estimation of a meta-regression model that employs a total of 2,894 estimates drawn from 121 previous studies indicated the superior impact of foreign ownership on firm performance in comparison with state and domestic private entities. Furthermore, the estimation of an extended meta-regression model that explicitly controls for the idiosyncrasies of transition economies and privatization policies strongly suggested that differences between countries in location, privatization method, and speed of policy implementation strongly influence the link between postâ€ privatization ownership structure and firm performance. We also found that these factors not only cause a remarkable gap between countries in terms of ex post improvement in firm performance but also significantly affect the interrelationship between foreign investors, domestic outsider owners, and firm managers, and the relative superiority of various domestic outsiders. Conclusive evidence of the harm caused to ex post firm performance by voucher privatization is one of the most noteworthy empirical findings in this paper.

/pdf/post-privatization-ownership-and-firm-performance-a-large-ylo95ymsdz.pdf

Post‐privatization ownership and firm performance: a large meta‐analysis of the transition literature

Purpose




The purpose of this paper is to investigate the importance of political connections in the emerging market context.




Design/methodology/approach




A case study analysis of three Russian pharmaceutical firms is conducted to uncover how they performed through the Russian transition – the institutional upheaval of the 1990s – and the ongoing state-led industrialization.




Findings




In the early years of transition, firms heavily rely on political networking to gain legitimacy and fill institutional voids. As institutions strengthen, the need for political networking is being substituted by arm’s length networking. Strengthening of institutions also results in a more stable business environment, evolving firms’ strategies from short-term core competency concentration to long-term innovative visions.




Research limitations/implications




Firms operating in the Russian, Commonwealth of Independent States and some other Eastern European state domains must be wary of complex ties that are prevalent in these countries and often can assist or hinder firm performance. Although formal institutions strengthen arm’s length networks, a close cooperation between strategic firms and the state remains.




Originality/value




The paper proposes two phases of the Russian transition and provides a taxonomy of strategic choices of Russian firms during the transition. Further, the paper describes the key institutional developments in the two phases of the Russian transition. Finally, a framework of political connections and their role in business operations in the two phases of the transition is provided.

/pdf/political-connections-and-strategic-choices-of-emerging-26xjwklai2.pdf

Political connections and strategic choices of emerging market firms: Case study of Russia’s pharmaceutical industry

Why do the reported effects of privatization on firm performance vary so much? This paper re-estimates these effects and tests potential explanations for heterogeneity using comprehensive, long-panel data for 70,000 firms in five East European economies. Estimated average effects are positive, about 5-12%, for measures of profitability, efficiency, and growth, but they vary across countries and time periods. Our analysis of heterogeneity in privatization effectiveness finds little systematic role for firm size, financial dependence, or technological complexity, but shows important variation by fraction privatized, ownership structure, firm quality, and the macroeconomic and institutional environment.

Where Does Privatization Work? Understanding the Heterogeneity in Estimated Firm Performance Effects

Financial‐Industrial Groups in Russia: Virtue or Vice

The report is based on the test, which measures whether foreign and domestic product market as well as domestic factor market competition affect firm efficiency, using a 1992-1998 panel of 14,961 Russian industrial firms, covering 75 percent of industrial employment in 1992. The results provide strong evidence that domestic product market competition, import competition, and local labor market competition have strong positive effects on firm efficiency. The impact of liberalization appears only gradually in the domestic product market, taking about four years to attain 90 percent of the long-run value, but we find no such lags with respect to import competition or labor market competition. The degree of local competition appears to have more of an effect than national competition, suggesting that markets are geographically segmented. Better transportation infrastructure appears to turn potential product market competition into actual competition, while at the same time reducing firms' monopsony power on the labor market by facilitating worker mobility across municipalities. We also find that non-state firms outperform state enterprises, even after controlling for selection bias in the determination of ownership. The results suggest that a reduction in import barriers, investment in transportation infrastructure, and elimination of interregional administrative trade barriers would stimulate industrial growth.

Market Competition and Firm Performance in Russia

http://www.personal.ceu.hu/staff/Almos_Telegdy/Finpaper%2018%20with%20acknowldegment.pdf

Where does privatization work? Understanding the heterogeneity in estimated firm performance effects

Popular Tasks used by Researchers

How can I help with your research?

Get more enhanced response by uploading the PDFs you want me to reference.

No relevant PDFs in your library

SciSpace is the AI research assistant for academics. Run systematic literature reviews on 280M+ papers, and write papers with cited sources. Trusted by 1M+ students, PhDs & researchers.

SciSpace | AI for Research

We encountered an error while loading the panel. Please try refreshing the page.

Something went wrong

Analyze PDFs

Code & Manuscripts

Funding & Grants

Literature & Patents

Medical & Clinical Data

Systematic Review

Visualize & Present

Web & Data

Build a Google Scholar-like website for your research.

Build a website

Create charts and images for your research

Create a Chart

Write a paper for submission to a journal

Draft a manuscript

Patent Search

Design eye-catching scientific posters in minutes.

Scientific Poster Generation

Systematic Literature Review

Anyone with the link can view this chat. You can switch it back to private anytime.

One task is running at the moment. Your messages will be shown right after.

Drag and drop or click here to browse

Loved by <highlight>1 million+</highlight> researchers

Extract a list of specific topics and their sources from unstructured text

Topics

Compare and analyze relevant papers that matches with your search

Papers

Get insights from PDFs and bookmarked papers from your library

My library

Recent searches

Try searching for:

Catch AI-generated content in scholarly and non-scholarly content

{ai} Detector

Ai Writer

Get PDF Summaries, highlighted text explanations 

Chat with PDF

Effortlessly create in-text citations and bibliographies in APA and 2,500 other formats

Citation generator

Get explanations, summaries, and answers on academic papers

Ease up your research workflow with {scispace}'s cohort of exciting AI tools

Elevate your academic writing skills and convey your ideas the way you want

Paraphraser

Explore our range of reading and writing tools

Your file is being prepared and should be ready in a few minutes. If it's a large file, it might take a bit longer. You can close this window, and we'll email you the file when it's done.

You have reached a maximum limit of <strong>{limit}</strong> columns in the table. Remove at least <strong>1</strong> column to add or create another one.

David Brown

Author Tools

Chat about Author

Papers

Where Does Privatization Work? Understanding the Heterogeneity in Estimated Firm Performance Effects

Financial‐Industrial Groups in Russia: Virtue or Vice

Market Competition and Firm Performance in Russia

Where does privatization work? Understanding the heterogeneity in estimated firm performance effects