Divide and Privatize: Firm Break-up and Performance
CESifo, Munich, 2011
CESifo Working Paper No. 3465
We analyze the long-term effects of firm break-up and ownership change on corporate performance. Our analysis is based on a unique data set for a large number of Czech firms spanning the period 1996–2005. We employ a propensity score matching procedure to deal with endogeneity problems. Our results, which are generally in line with the positive effects of firm break-up found in the developed-market literature, show that the initial effects of firm break-up are positive but after a certain point they quickly diminish over time. Factors like changes in ownership structure and management are to be found behind later improvements in the performance of firms.
Industrial Organisation
Empirical and Theoretical Methods