Equality, Participation, Transition: Essays in Honour of Branko Horvat

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Furthermore, there are interesting patterns concerning minority ownership. Thus in 1995, foreigners were very rarely the largest minority group in firms owned by insiders. Similarly, insiders (and especially employees) were unlikely to be the largest minority in firms in which foreigners had majority ownership. From the perspective of minority ownership, there are strong indications that ownership structures are often inert. Thus in 1997 (as in 1995), large degrees of minority ownership by employees continued to be a relatively infrequent occurrence in firms in which most ownership lies overseas. At the same time, several changes were apparent between 1995 and 1997 in the relationship between majority owner and key minority owners. Most interestingly, perhaps, is the observed tendency for all minority groups to become more important in firms in which managers have the majority share. 10.5 Economic effects of privatization Derek C. Jones and Niels Mygind 169 To analyze relationships between structures of and changes in ownership and enterprise performance, we draw on an approach developed by Frydman et al. (1997) and also used and extended for the case of Russia (Jones, 1998). While the method of Frydman et al. (1997) is broadly comparable to approaches used in other studies (for example, Earle and Estrin, 1996), this particular empirical strategy has some novel attractions. Potentially most important, since the year of privatization varies across firms, an attempt is made to measure all key variables in privatization (rather than in calendar) time. Moreover, to deal with noisy data, performance is usually measured as an average (a growth rate) over a period of time (rather than for a single year). In addition, in an attempt to focus on the post-privatization performance of firms, a control for inherited pre-privatization differences in performance is included (namely, a measure of performance during the initial year of privatization). Then, the transition or marketization effect (which is common to all firms) is defined as the sum of the constant term plus the coefficient on the initial performance variable multiplied by average initial performance. 11 In some regressions, the coefficient on a privatization dummy measures the incremental performance effect specific to privatized firms, 12 whereas in other specifications a set of dummies for the largest owner (different forms of privatization) are included instead of the privatization dummy variable. While the empirical strategies of Frydman et al. used in this approach are useful and innovative, as our earlier review indicated, other theoretical and empirical evidence suggests that when examining the
170 Privatization: Evidence from Estonia effects of privatization upon enterprise performance, most studies of transition economies omit what are potentially important variables. For example, many empirical studies fail to examine the potential effects of what Horvat (1982: ch. 6) calls ‘real participation’ upon economic performance. In addition, most studies do not allow for changes in dominant/majority ownership, nor do they take into account the potential effects on performance of ownership by other (minority) groups. 13 Hence in our empirical work, we not only report findings from estimates which emulate some of the key strategies adopted by Frydman et al. (1997) but also estimate specifications which involve substantial extensions of that approach. 14 In addition, we always include dummy variables for industries and regions. Thus, they help to isolate the privatization effect and hopefully produce more reliable estimates of the privatization effect. However, one consequence of this extension is that the transition effect is no longer a unique number, but now differs by industry or region. Hence, when discussing our findings, we will not consider the transition effect in great detail. In one set of specifications we use estimate equations of the form: AVPERF o INIPERF PRV i i IND Tallinn (1) where AVPERF is average performance computed for some measure of performance using annual data over the period 1994–7, except for those firms which were privatized during that period in which case it is measured relative to the year of privatization, INIPERF is a corresponding measure of the level of performance during the first year of privatization, and PRV is a privatization dummy. 15 For ease of comparability with Frydman et al. (1997), performance measurers are rates of growth and many of the measures of performance are the same set as those used in that study, for example, the growth in employment and the growth in labour productivity. In addition, our data enable us to construct the ratio of exports/sales, though other measures, notably costs, are not available for all years. We always include IND, which is a set of industry dummies, as well as a dummy variable for whether or not the firms are located in the capital district (Tallinn). In a related set of estimates, we replace the privatization dummy (PRV) by a set of dummy variable measures for ownership. This set of private ownership variables (hereafter the OL vector) contains measures of majority ownership (unlike most studies which use measures of dominant ownership). Also, as is the practice in the literature, the type of private ownership (which often changes during the period) is assessed in 1997 – that is at the end of the period of study.
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Equality, Participation, Transition
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First published in Great Britain 20
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vi Contents 9 Self-Management, Empl
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List of Figures 02.1 First Law of O
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x Foreword institution most dear to
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Notes on the Contributors Ivo Bića
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xiv Notes on the Contributors membe
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xvi Notes on the Contributors done
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xviii Notes on the Contributors pri
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Introduction: Branko Horvat - Beyon
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xxii Introduction Dame (1978), Univ
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xxiv Introduction theory led him to
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xxvi Introduction though friendly,
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xxviii Introduction The second pape
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xxx Introduction disciplines such a
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Branko Horvat: Select Bibliography
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xxxiv Branko Horvat: Select Bibliog
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xxxvi Branko Horvat: Select Bibliog
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xxxviii Branko Horvat: Select Bibli
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2 Horvat’s Contributions to Econo
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10 Horvat’s Contributions to Econ
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2 Individual Initiative, Entry and
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28 Egalitarianism On Its Own Thomas
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30 Egalitarianism On Its Own projec
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32 Egalitarianism On Its Own absenc
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34 Egalitarianism On Its Own tithin
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36 Egalitarianism On Its Own what s
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38 Egalitarianism On Its Own 100% 9
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40 Egalitarianism On Its Own contri
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42 Egalitarianism On Its Own anothe
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44 Egalitarianism On Its Own politi
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46 Egalitarianism On Its Own Eckel,
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4 Determinants of Cross-Country Inc
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50 Determinants of Income Inequalit
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56 GINI GINI 65 60 55 50 45 40 35 3
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Table 4.2 The regressions: dependen
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5 Illyrian Theories of Cooperative
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92 Employee Participation in Enterp
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EMPLOYEE RETURN ONLY PROFIT PROFIT
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100 Employee Participation in Enter
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7 Employee Involvement and the Mode
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104 Employee Involvement and the Mo
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Page 157 and 158: 8 Uneasy Symbiosis of a Market Econ
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Page 189 and 190: Table 9.1 Methods of privatization
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Page 223 and 224: 11 Growth Theory and Transition Eco
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Page 241 and 242: 202 Index economic growth - continu
Page 243 and 244: 204 Index Horvat, Branko - continue
Page 245 and 246: 206 Index neoclassical economics -
Page 247 and 248: 208 Index ‘third way’, 88, 104
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Equality, Participation, Transition: Essays in Honour of Branko Horvat

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