Politická ekonomie 2011, 59(5):579-598 | DOI: 10.18267/j.polek.809

Vliv rozdělení českých podniků na ziskovost a produktivitu

Evžen Kočenda, Jan Hanousek

Effect of the Czech Firms Break-Up on their Profitability and Productivity

In this article we analyze medium- and long-term effects of firm break-up (and subsequent change in ownership) on its profitability and productivity. We use an extensive data-set of the Czech firms for the period 1996-2005. We employ the propensity score based matching methodology to account for potential endogeneity. Our results show that initial effects of the firm break-up are positive but they vanish in five to seven years after the break-up. Hence, the break-up of large and less efficient companies delivers a positive effect on corporate performance for a period of time. The effect is not permanent, though. Subsequent development in profitability and productivity is likely affected by ownership structure, corporate governance and other micro-level factors.

Keywords: privatization, corporate performance, endogeneity, break-up of firms, ownership changes, emerging markets, propensity score matching procedure
JEL classification: D23, G32, G34, L20, M21, P47

Published: October 1, 2011  Show citation

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Kočenda, E., & Hanousek, J. (2011). Effect of the Czech Firms Break-Up on their Profitability and Productivity. Politická ekonomie59(5), 579-598. doi: 10.18267/j.polek.809
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