Structural Adjustment, Macroeconomics - General & Miscellaneous, Economic Policies in Europe, Privatization, Eastern Europe - International Business
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Overview
This paper analyzes the financial and operating data (1992 to 1995) for more than 6,300 industrial firms in seven countries in Central and Eastern Europe--Bulgaria, Czech Republic, Hungary, Poland, Romania, Slovak Republic and Slovenia. The authors compare the extent of restructuring across firms in these countries to determine which country's policies are most effective in encouraging restructuring. The analysis examined the following measures of restructuring: a) profitability; b) proportion of firms with a positive operating cash flow; c) average operating cash flow as a percent of revenue; d) growth in labor productivity; e) growth in total factor productivity; and f) growth in exports. The authors next used econometric analysis to identify government policies that most encouraged firms to restructure. The study also found that privatization had a large impact on restructuring, but there was little difference in productivity between private firms in countries that used mass privatization methods and in the other countries which have used standard methods. The authors also examined the role of banks in the restructuring of firms. They concluded that recapitalizing banks to compensate for their bad loans and encouraging them to forgive bad loans is unlikely to help firms restructure very much. A safer course of action is to recapitalize banks only at the time of their privatization and after a large share of enterprises are privatized.Book Details
Published
March 31, 1998
Publisher
Washington, D.C. : World Bank, c1997.
Pages
32
Format
Hardcover
ISBN
9780821339756