The Results of 'Mass Privatization' in Romania: A First Empirical Study

SITE Working Paper No. 122

Posted: 14 Nov 1997

See all articles by John S. Earle

John S. Earle

George Mason University - Schar School of Policy and Government; IZA Institute of Labor Economics

Almos Telegdy

Corvinus University of Budapest; Magyar Nemzeti Bank

Multiple version iconThere are 2 versions of this paper

Date Written: October 1997

Abstract

This paper provides a first assessment of the contribution of the Mass Privatization Program (MPP) to privatization in Romania. Despite the potential importance of the 1995-96 program, which offered shares in nearly 5000 companies to citizens in exchange for coupons, little information has been made available to the public on its outcomes. Analyzing a comprehensive database of companies in the MPP, we find that an average of only 18.7 percent of the shares of the companies were actually transferred to Romanian citizens, and only 7.8 percent of the companies in the program were majority privatized (on a size-weighted basis). We estimate that the so-called "mass privatization" accounted for only about 5.5 percent of the state-owned enterprise assets in the country, despite the enormous hype about the program from the previous government. We place our findings in the context of the history of Romanian privatization policies since 1990, we provide some comparisons with mass privatization programs in other countries, and we analyze the implications of the MPP for the corporate governance and restructuring of enterprises.

JEL Classification: O5

Suggested Citation

Earle, John S. and Telegdy, Almos, The Results of 'Mass Privatization' in Romania: A First Empirical Study (October 1997). SITE Working Paper No. 122, Available at SSRN: https://ssrn.com/abstract=11544

John S. Earle (Contact Author)

George Mason University - Schar School of Policy and Government ( email )

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HOME PAGE: http://earle.gmu.edu

IZA Institute of Labor Economics

P.O. Box 7240
Bonn, D-53072
Germany

Almos Telegdy

Corvinus University of Budapest ( email )

Hungary

Magyar Nemzeti Bank ( email )

Szabadsag ter 8-9
Budapest, H-1850
Hungary

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