Enterprise Performance, Privatization and the Role of Ownership in Bulgaria

In both economically developed and developing countries, privatisation, budget austerity measures and market liberalisations have become key aspects of structural reform programs in the last three decades. These three recommended policies were parts of a strong revival of classical and neo-classical schools of thought since the middle of the 1970s. Such programs aim to achieve higher microeconomic ­efficiency and foster economic growth, whilst also aspiring to reduce public sector borrowing requirements through the elimination of unnecessary subsidies. For firms to achieve superior performance a change in ownership from public (state ownership) to private has been recommended as a vital condition. To assess the ownership role, the economic performances of private, public and mixed enterprises in Bulgaria is compared through the use of factor analysis method. The extracted factors, using data of two years, 1998 and 2000, do not identify ownership as a key performance factor.