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Vol. 67, No. 4, pp. 354-380 (2016)

“Does Privatization Improve Firm Performance?: A Systematic Review of the Transition Literature”
Satoshi Mizobata (Institute of Economic Research, Kyoto University), Ichiro Iwasaki (Institute of Economic Research, Hitotsubashi University)

At the core of studies on the post-communist transition economies is the privatization problem in Eastern Europe and the former Soviet Union. There is a large literature on the effects of post-privatization ownership on firm performance. Their empirical results, however, are far from clear and confused to some extent due to the significant differences in specificities of transition countries/regions, estimation period, and other research constraints. In this paper, the authors conduct a systematic review of the relevant literature to assess various kinds of conclusions regarding the relationship between ownership structure and performance in privatized enterprises as a whole. We found that the effect size and statistical significance of foreign ownership greatly exceed those of the state and domestic private owners. We also found that the privatization method has a considerable impact on the effort level of corporate owners.