Managerial Change, Competition, and Privatization in Ukraine
Posted: 16 Oct 2003
This paper analyzes the determinants of managerial change and the impact of privatization, competition, and managerial change on firm performance, using survey data from 300 Ukrainian firms. Ownership and competition are shown to be linked to managerial change; privatized firms experience less turnover than state firms, which suggests an entrenchment effect. However, managerial change in privatized and de novo firms is positively related to performance, which suggests a disciplining impact of private ownership. Moreover, dominant firms have more managerial turnover. Although managerial change and privatization do not individually affect performance, together they have a positive effect on profitability. In addition, competition improves profitability and productivity in privatized firms only. These findings suggest that privatization, competition, and managerial change are complementary measures in improving firm performance.
Keywords: Complementarity, Managerial change, Competition, Privatization, Firm
JEL Classification: D21, G34, L33, J63
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