Please use this identifier to cite or link to this item: https://hdl.handle.net/10419/64369 
Year of Publication: 
2005
Series/Report no.: 
Upjohn Institute Working Paper No. 05-121
Publisher: 
W.E. Upjohn Institute for Employment Research, Kalamazoo, MI
Abstract: 
This paper estimates the effect of privatization on multifactor productivity (MFP) using long panel data for nearly the universe of initially state-owned manufacturing firms in four economies. We exploit the key longitudinal feature of our data to measure and control for preprivatization selection bias and to estimate long-run impacts. We find that the magnitudes of our estimates are robust to alternative functional forms, but sensitive to how we control for selection. Our preferred random growth models imply that majority privatization raises MFP about 15% in Romania, 8% in Hungary, and 2% in Ukraine, while in Russia it lowers it 3%. Privatization to foreign rather than domestic investors has a larger impact, 18-35%, in all countries. Positive domestic effects appear within a year in Hungary, Romania, and Ukraine and continue growing thereafter, but take 5 years after privatization to emerge in Russia.
Subjects: 
privatization
productivity
foreign ownership
random growth model
transition
Hungary
Romania
Russia
Ukraine
JEL: 
D24
G34
L33
P31
Persistent Identifier of the first edition: 
Document Type: 
Working Paper

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