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Privatisation, corporate control and employment growth: evidence from a panel of large Polish firms, 1996-2002

Author

Listed:
  • Tomasz Marek Mickiewicz

    (UCL School of Slavonic and East European Studies)

  • Christopher Gerry

    (UCL School of Slavonic and East European Studies)

  • Kate Bishop

    (Office for National Statistics, 1 Drummond Gate, London SW1V 2QQ)

Abstract
Using panel data on large Polish firms this paper examines the relationship between corporate control structures, sales growth and the determinants of employment change during the period 1996-2002. We find that privatised and de novo firms are the main drivers of employment growth and that, in the case of de novo firms, it is foreign ownership which underpins the result. Interestingly, we find that being privatised has a positive impact on employment growth but that this impact is concentrated within a range of three to six years after privatisation. In contrast with the findings of earlier literature, we find evidence that there are no systematic differences in employment response to negative sales growth across the ownership categories. On the other hand, employment in state firms is less responsive to positive sales growth. From these combined results we infer that the behaviour of state firms is constrained by both insider rent sharing and binding budget constraints. Consistent with this, we find that privatised companies, three to six years post-privatisation, are the firms for whom employment is most responsive to positive sales growth and as such, offer the best hope for rapid labour market expansion.

Suggested Citation

  • Tomasz Marek Mickiewicz & Christopher Gerry & Kate Bishop, 2004. "Privatisation, corporate control and employment growth: evidence from a panel of large Polish firms, 1996-2002," UCL SSEES Economics and Business working paper series 47, UCL School of Slavonic and East European Studies (SSEES).
    • Handle: RePEc:see:wpaper:47
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    Cited by:

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    2. Bhaumik, Sumon Kumar & Dimova, Ralitza & Nugent, Jeffrey B., 2011. "Off-farm labor supply and labor markets in rapidly changing circumstances: Bulgaria during transition," Economic Systems, Elsevier, vol. 35(3), pages 378-389, September.
    3. Kate Bishop, 2006. "Knowledge based entrepreneurship in the Czech Republic and Hungary: results from 4 case studies," UCL SSEES Economics and Business working paper series 71, UCL School of Slavonic and East European Studies (SSEES).
    4. Tullio Buccellato, 2007. "Convergence across Russian regions: a spatial econometrics approach," UCL SSEES Economics and Business working paper series 72, UCL School of Slavonic and East European Studies (SSEES).
    5. Vernikov, Andrei, 2007. "Corporate governance and control in Russian banks," MPRA Paper 10028, University Library of Munich, Germany.
    6. Zorica Kalezić, 2015. "Ownership Concentration and Firm Performance in Transition Economies: Evidence from Montenegro," Journal of Central Banking Theory and Practice, Central bank of Montenegro, vol. 4(3), pages 5-64.
    7. Slavo Radosevic, 2007. "Research and Development and Competitiveness in South Eastern Europe: Asset or Liability for EU Integration?," UCL SSEES Economics and Business working paper series 75, UCL School of Slavonic and East European Studies (SSEES).
    8. Slavo Radosevic, 2006. "Growth, Integration and Spillovers in the Central and East European Software Industry," UCL SSEES Economics and Business working paper series 69, UCL School of Slavonic and East European Studies (SSEES).
    9. Slavo Radosevic & Marat Myrzakhmet, 2006. "Between vision and reality: promoting innovation through technoparks in Kazakhstan," UCL SSEES Economics and Business working paper series 66, UCL School of Slavonic and East European Studies (SSEES).
    10. Lami, Endrit & Imami, Drini & Kächelein, Holger, 2016. "Fuelling political fiscal cycles by opportunistic privatization in transition economies: The case of Albania," Economic Systems, Elsevier, vol. 40(2), pages 220-231.
    11. Christopher J. Gerry & Eugene Nivorozhkin & John A. Rigg, 2008. "The great divide: 'ruralisation' of poverty in Russia," Cambridge Journal of Economics, Cambridge Political Economy Society, vol. 32(4), pages 593-607, July.
    12. Kenneth Wilson, 2008. "Party-system institutionalization and democracy: the case of Russia," UCL SSEES Economics and Business working paper series 91, UCL School of Slavonic and East European Studies (SSEES).
    13. Karoly Fazekas & Gabor Kezdi (ed.), 2007. "The Hungarian Labour Market 2007," The Hungarian Labour Market Yearbooks, Institute of Economics, Centre for Economic and Regional Studies, number 2007, December.
    14. Ben Salha, Ousama, 2013. "Does economic globalization affect the level and volatility of labor demand by skill? New insights from the Tunisian manufacturing industries," Economic Systems, Elsevier, vol. 37(4), pages 572-597.

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    More about this item

    Keywords

    employment; transition; privatisation; asymmetry; ownership; insiders; corporate control;
    All these keywords.

    JEL classification:

    • P31 - Political Economy and Comparative Economic Systems - - Socialist Institutions and Their Transitions - - - Socialist Enterprises and Their Transitions
    • C23 - Mathematical and Quantitative Methods - - Single Equation Models; Single Variables - - - Models with Panel Data; Spatio-temporal Models
    • J23 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Labor Demand

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