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Employee Buyouts and the Transformation of Russian Industry


Employee buyout, the main privatization vehicle for large Russian industrial enterprises, has been widely critized because it provides no new funds for investment, produces sub-optimal decisions in terms of operations and strategy, and results in faulty corporate governance. While our study confirms these features, our analysis suggests that employee buyout offers a major advantage as a versatile structure that can change over time to produce a genuine industrial transformation.

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Buck, T., Filatotchev, I. & Wright, M. Employee Buyouts and the Transformation of Russian Industry. Comp Econ Stud 36, 1–15 (1994).

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