Abstract
Frequently the shareholders of privatized transition firms also hold stakes in the firm they own. This two-sided role of an agent may give rise to potential conflicts when the restructuring strategy of a firm has to be decided. This shareholder/stakeholder conflict is analyzed in a simple framework including the corporate control dimension of the problem. It is found that for feasible specifications of the conflict, restructuring in the economy will fall short of complete efficiency. However, for certain parameter values the shareholder/stakeholder issue turns out to be a non-problem.
This is a preview of subscription content, log in via an institution to check access.
Access this chapter
Tax calculation will be finalised at checkout
Purchases are for personal use only
Preview
Unable to display preview. Download preview PDF.
References
Aghion, P. and O. Blanchard (1996) On Insider Privatization. European Economic Review, 40(3–4), 759–66.
Aghion, P. and O. Blanchard (1998) On Privatization Methods in Eastern Europe and their Implications. Economics of Transition, 6(1), 87–99.
Aghion, P. and R. Burgess (1994) Financing in Eastern Europe and the Former Soviet Union. In: Dilip K. Das (ed.), International Finance: Contemporary Issues. London: Routledge.
Aghion, P. and W. Carlin (1996) Restructuring Outcomes and the Evolution of Ownership Patterns in Central and Eastern Europe. Economics of Transition, 4(2), 371–88.
Bolton, P. and G. Roland (1992) Privatization policies in Central and Eastern Europe. Economic Policy, 15, 276–309.
Brada, J.C. (1996) Privatisation is Transition — Or is it? Journal of Economic Perspectives, 10(2), 67–86.
Brücker, H., P.J.H. Schröder, and C. Weise (2005) Can EU Conditionality Remedy Soft Budget Constraints in Transition Countries. Journal of Comparative Economics, 33(2), 371–386.
Cauley, J., R. Cornes and T. Sandler (1999) Stakeholder Incentives and Reform in China’s State-Owned Enterprises: A Common-Property Theory. China Economic Review, 10, 191–06.
Commander, S., S. Dhar and R. Yemtsov (1996) How Russian Firms Make their Wage and Employment Decisions. In: S. Commander, Q. Fan and M.E. Schaffer (eds), Enterprise Restructuring and Economic Policy in Russia. Washington, DC: World Bank.
Commander, S. and M. Schankerman (1997) Enterprise Restructuring and Social Benefits. Economics of Transition, 5(1), 1–24.
Djankov, S. and P. Murrell (2002) Enterprise Restructuring in Transition: A Quantitative Survey. Journal of Economic Literature, 40(3), 739–92.
Dyck, U.A. (1997) Privatization in Eastern Germany: Management Selection and Economic Transition. American Economic Review, 87(4), 565–97.
Earle, J. S. and S. Estrin (2003) Privatisation, Competition, and Budget Constraints: Disciplining Enterprises in Russia. Economics of Planning, 36, 1–22.
Filatochev, I., M. Wright and M. Bleaney (1999a) Privatisation, Insider Control and Managerial Entrenchment in Russia. Economics of Transition, 7(2), 481–04.
Filatochev, I., M. Bleaney, and M. Wright (1999b) Insider-Controlled Firms in Russia. Economics of Planning, 32, 129–51.
Filatotchev, I., M. Wright, K. Uhlenbruck, L. Tihanyi and R.E. Hoskisson (2003) Governance, Organizational Capabilities, and Restructuring in Transition Economies. Journal of World Business, 38(4), 331–47.
Freinkman, L.M. and I. Starodubrovskaya (1996) Restructuring of Enterprise Social Assets in Russia: Trends, Problems, Possible Solutions. Communist Economies & Economic Transformation, 8(4), 437–469.
Kornai, J. (2001) Hardening the Budget Constraint: The Experience of the Post-socialist Countries. European Economic Review, 45(4), 1573–99.
Kuznetsova, O. and A. Kuznetsov (2001) The Virtues and Weaknesses of Insider Shareholding. Journal of East-West Business, 6 (4), 89–106.
Nuti, D. M. (1997a) Employeeism: Corporate Governance and Employee Share Ownership in Transitional Economies. In: M.I. Blejer and M. Skreb (eds), Macroeconomic Stabilisation in Transition Economies. Cambridge: Cambridge University Press.
Nuti, D.M. (1997b) Employee Ownership in Polish Privatizations. In: M. Uvalic and D.Vaughan-Whitehead, (eds), Privatization Surprises in Transition Economies: employee-ownership in Central and Eastern Europe. Cheltenham: Edward Elgar.
Nuti, D.M. (1998) Stocks and Stakes: The Case for Protecting Stakeholders Interests. Economic Analysis, 1(1), 7–16.
Roland, G. and K. Sekkat (2000) Managerial Career Concerns, Privatization and Restructuring in Transition Economies. European Economic Review, 44(10), 1857–72.
Schröder, P.J.H. (2001) On the Speed and Boundaries of Structural Adjustment when Fiscal Policy is Tight. Economic Systems, 25(4), 345–364.
Schröder, P.J.H. (2003) Insider Privatization and Restructuring Incentives. Economics of Planning, 36(4), 333–49.
Shleifer, A. and R.W. Vishny (1994) Politicians and Firms. Quarterly Journal of Economics, 109, 995–1025.
Wright, P. and A. Mukherji (1999) Inside the Firm: Socioeconomic Versus Agency Perspectives on Firm Competitiveness. Journal of Socio-Economics, 28, 295–307.
Editor information
Editors and Affiliations
Copyright information
© 2007 Philipp J.H. Schröder
About this chapter
Cite this chapter
Schröder, P.J.H. (2007). When do Stakes in Restructuring put Restructuring at Stake?. In: Nahorski, Z., Owsiński, J.W., Szapiro, T. (eds) The Socio-Economic Transformation. Palgrave Macmillan, London. https://doi.org/10.1057/9780230379039_2
Download citation
DOI: https://doi.org/10.1057/9780230379039_2
Publisher Name: Palgrave Macmillan, London
Print ISBN: 978-1-349-28356-9
Online ISBN: 978-0-230-37903-9
eBook Packages: Palgrave Economics & Finance CollectionEconomics and Finance (R0)