Investment and Wages during the Transition: Evidence from Slovene Firms

http://deepblue.lib.umich.edu/bitstream/2027.42/39571/3/wp184.pd

Behavior of a Slovenia Firm in Transition

http://deepblue.lib.umich.edu/bitstream/2027.42/39416/3/wp26.pd

Investment Wages and Ownership During the Transition to a Market Economy: Evidence from Slovenian Firms

http://deepblue.lib.umich.edu/bitstream/2027.42/39534/3/wp144.pd

Legal Corruption, Politically Connected Corporate Governance and Firm Performance

In this paper we present and test a theory of how political corruption, found in many transition and emerging market economies, affects corporate governance and productive efficiency of firms. Our model predicts that underdeveloped democratic institutions that do not punish political corruption result in political connectedness of firms that in turn has a negative effect on performance. We test this prediction on an almost complete population of Slovenian joint stock companies with 100 or more employees. Using the supervisory board structure, together with balance sheet and income statement data for 2000-2010, we show that a higher share of politically connected supervisory board members leads to lower productivity

Behavior of Participatory Firms in Yugoslavia: Lessons for Transforming Economies.

This paper develops a multiparty model of enterprise behavior, with the management, workers, and government authorities being the decisionmakers. The model captures the behavior of Yugoslav enterprises in the 1970s and 1980s, enterprises in transitional economies, and public-sector bargaining in Western countries. Estimating the model on Yugoslav firm-level data from the 1970s and 1980s indicates that the perverse behavior predicted by the Ward-Domar-Vanek model of labor-managed firms is not supported by the data as firms place emphasis on both wages and employment. A direct test shows that the employment response to output price changes is insignificant. Coauthors are Jan Svejnar, Dubravko Mihaljek, and Vesna Prasnikar. Copyright 1994 by MIT Press.

Investment, Wages and Ownership During the Transition to a Market Economy: Evidence from Slovenian Firms

Given the concern about restructuring and the role of insiders during the transition, we analyse the determinants of (and trade-off between) investment and wages in Slovenian firms. We find that investment behaviour is more consistent with the imperfect capital market (internal funds) hypothesis than with the neoclassical or accelerator models. Firms also display a trade-off between investment and wages, and workers share in firms’ surplus and appropriate funds that are supposed to be used for depreciation investment. Most findings are consistent with the principal theoretical models of restructuring. The models, however, underestimate the power of (elite) managers to restrain worker demands and overestimate this power on the part of external owners.investment; ownership; restructuring; wages