Please use this identifier to cite or link to this item: https://hdl.handle.net/10419/64331 
Year of Publication: 
2004
Series/Report no.: 
Upjohn Institute Working Paper No. 04-107
Publisher: 
W.E. Upjohn Institute for Employment Research, Kalamazoo, MI
Abstract: 
We analyze the impact of privatization on multifactor productivity (MFP) using long panel data for nearly the universe of initially stateowned manufacturing firms in four economies. Controlling for firm and industry-year fixed effects and employing a wide variety of measurement approaches, we estimate that majority privatization raises MFP about 28% in Romania, 22% in Hungary, and 3% in Ukraine, with some variation across specifications, while in Russia it lowers it about 4%. Privatization to foreign rather than domestic investors has a larger impact (about 44%) and is much more consistent across countries. The positive effects emerge within a year in Hungary, Romania, and Ukraine and continue to grow thereafter, but are still ambiguous even after 5 years in Russia. Pre-privatization MFP exceeds that of firms remaining state-owned in all countries, implying that cross-sectional estimates overstate privatization effects. The patterns of the estimated effects cast doubt on a number of explanations for when privatization works.
Subjects: 
privatization
productivity
foreign ownership
Hungary
Romania
Russia
Ukraine
transition
JEL: 
D24
G34
L33
P31
Persistent Identifier of the first edition: 
Document Type: 
Working Paper

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