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Privatisation, corporate control and employment growth: evidence from a panel of large Polish firms, 1996-2002

Mickiewicz, T.; Gerry, C.J.; Bishop, K.; (2004) Privatisation, corporate control and employment growth: evidence from a panel of large Polish firms, 1996-2002. (Economics Working Papers 47). Centre for the Study of Economic and Social Change in Europe, SSEES, UCL: London, UK. Green open access

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Abstract

Using panel data on large Polish firms this paper examines the relationship between corporate control structures, sales growth and the determinants of employment change during the period 1996-2002. We find that privatised and de novo firms are the main drivers of employment growth and that, in the case of de novo firms, it is foreign ownership which underpins the result. Interestingly, we find that being privatised has a positive impact on employment growth but that this impact is concentrated within a range of three to six years after privatisation. In contrast with the findings of earlier literature, we find evidence that there are no systematic differences in employment response to negative sales growth across the ownership categories. On the other hand, employment in state firms is less responsive to positive sales growth. From these combined results we infer that the behaviour of state firms is constrained by both insider rent sharing and binding budget constraints. Consistent with this, we find that privatised companies, three to six years post-privatisation, are the firms for whom employment is most responsive to positive sales growth and as such, offer the best hope for rapid labour market expansion.

Type: Working / discussion paper
Title: Privatisation, corporate control and employment growth: evidence from a panel of large Polish firms, 1996-2002
Open access status: An open access version is available from UCL Discovery
Publisher version: http://www.ssees.ucl.ac.uk/wp47sum.htm
Language: English
Additional information: Please see http://discovery.ucl.ac.uk/12935 for a version published in the journal Economic Systems
Keywords: Employment, transition, privatisation, asymmetry, ownership, insiders, corporate control
UCL classification: UCL > Provost and Vice Provost Offices > UCL SLASH > SSEES
URI: https://discovery.ucl.ac.uk/id/eprint/17526
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