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Effect of Enterpise Break-Ups on Performance: Case of Former Yugoslav Republic of Macedonia

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  • Polona Domadenik
  • Lubomir Lizal
  • Marko Pahor

Abstract

The empirical transition literature on the comparison of restructuring prior to privatization is quite limited. Macedonia is a specific case among transition economies where a large number of break-ups occurred at the beginning of privatization. Using firm-level data, we estimate the effects of the break-ups of enterprises on the subsequent performance of the “master enterprises” and spun off divisions during the period of privatization. We estimate the performance effects by comparing the performance of enterprises that remained intact to the performance of enterprises that experienced spin-offs and the newly established subsidiaries. The goal is to provide empirical evidence on the issue of the effect of pre-privatization restructuring. Our results suggest that the breakups were not guided by efficiency or performance goals but rather managerial self-interests.

Suggested Citation

  • Polona Domadenik & Lubomir Lizal & Marko Pahor, 2003. "Effect of Enterpise Break-Ups on Performance: Case of Former Yugoslav Republic of Macedonia," CERGE-EI Working Papers wp216, The Center for Economic Research and Graduate Education - Economics Institute, Prague.
    • Handle: RePEc:cer:papers:wp216
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    Cited by:

    1. Evzen Kocenda & Jan Hanousek, 2012. "Firm break-up and performance," Economics of Governance, Springer, vol. 13(2), pages 121-143, June.
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    3. repec:cnb:ocpubv:rb11/2 is not listed on IDEAS
    4. repec:cnb:ocpubv:rb10/2 is not listed on IDEAS
    5. Lazareva Olga, "undated". "Adjusting Boundaries of Russian Firms," EERC Working Paper Series 04-08e, EERC Research Network, Russia and CIS.
    6. repec:cnb:ocpubv:rb12/1 is not listed on IDEAS
    7. repec:cnb:ocpubv:rb11/1 is not listed on IDEAS

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    More about this item

    JEL classification:

    • D21 - Microeconomics - - Production and Organizations - - - Firm Behavior: Theory
    • D24 - Microeconomics - - Production and Organizations - - - Production; Cost; Capital; Capital, Total Factor, and Multifactor Productivity; Capacity
    • L11 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance - - - Production, Pricing, and Market Structure; Size Distribution of Firms
    • P11 - Political Economy and Comparative Economic Systems - - Capitalist Economies - - - Planning, Coordination, and Reform

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