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

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  • Janez Prasnikar
  • Jan Svejnar

Abstract

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.
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  • Janez Prasnikar & Jan Svejnar, 1998. "Investment Wages and Ownership During the Transition to a Market Economy: Evidence from Slovenian Firms," William Davidson Institute Working Papers Series 144, William Davidson Institute at the University of Michigan.
    • Handle: RePEc:wdi:papers:1998-144
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    References listed on IDEAS

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    Cited by:

    1. Polona Domadenik & Lubomír Lízal & Marko Pahor, 2012. "The Effect of Enterprise Break-Ups on Performance. The Case of the Former Yugoslav Republic of Macedonia," Revue économique, Presses de Sciences-Po, vol. 63(5), pages 849-866.
    2. Lizal, L., 1999. "Does a Soft Macroeconomic Environment Induce Restructuring on the Microeconomic Level during the Transition Period? Evidence from Investment Behavior of Czech Enterprises," CERGE-EI Working Papers wp147, The Center for Economic Research and Graduate Education - Economics Institute, Prague.
    3. Jan Babecky & Kamil Galuscak & Diana Zigraiova, 2017. "Wage Dynamics and Financial Performance: Evidence from Czech Firms," Working Papers 2017/14, Czech National Bank.
    4. Curtiss, Jarmila & Ratinger, Tomas & Medonos, Tomas, 2012. "Ownership and Investment Behaviour in Transition Countries: A Case Study of Collective and Corporate Farms in the Czech Republic," Working papers 122841, Factor Markets, Centre for European Policy Studies.

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    More about this item

    JEL classification:

    • P2 - Political Economy and Comparative Economic Systems - - Socialist and Transition Economies
    • J5 - Labor and Demographic Economics - - Labor-Management Relations, Trade Unions, and Collective Bargaining
    • D92 - Microeconomics - - Micro-Based Behavioral Economics - - - Intertemporal Firm Choice, Investment, Capacity, and Financing
    • C33 - Mathematical and Quantitative Methods - - Multiple or Simultaneous Equation Models; Multiple Variables - - - Models with Panel Data; Spatio-temporal Models

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