| Abstract: |
The paper examines the dependence of enterprise restructuring in transition on the mode of privatization. As a building block a triangular model Owner-Manager-Firm is presented, which operationalizes the principal-agent problem (owner's competence to motivate a manager appropriatelly) as well as the owner's motivation (an important parameter of the selection of new owners) and the manager's competence (scare resource in transition economies). From this basic framework a model called Firm-Behavior Determinants is derived, the main contributions of which are (1) an argument that owners and managers motivation is a more important determinant of firm behavior than their competence and (2) an analysis of the way privatization modifies the environment and affects firms behavior. Using the model of the firm-behavior determinants, the author reaches non-trivial statements about the effects of foreign owners participation and the degree of ownership concentration on the firm's performance. What follows is the characterization of privatization methods which serves for deriving theoretical hypotheses that enterprises privatized by a public tender to the hands of a single owner have the best chance for restructuring, while enterprises privatized through the direct sale of a majority stake as well as those privatized via vouchers with their majority ending up in the hands of a single owner or a group of cooperating owners (funds) have the worst chance for further restructuring. Adding the assumption of the dominance of the ownership concentration aspect over the owner-identity aspect, the theoretical hypotheses reach the form of a clear ranking of various types of enterprises, distinguished by their privatization, from those with the highest to those with the lowest expected restructuring levels. All arguments in the paper are based on the knowledge available as soon as in the moment of decision-making over the privatization policies in transition countries. In the annexed part the author suggests the way of data procession for the derivation of practical hypotheses. These hypotheses assign the best perspectives for restructuring to the industries of refrigerating and tobacco production, while the worst perspectives are assigned to leather-processing, textile, machinery and paper producing industries. If the primary objective of privatization was the economy's restructuring, i.e. overcoming competitiveness gaps, the paper contributes not only to the discussion on enterprise restructuring but also to the discussion on the privatization policies assessment.
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