Manager Interests, Breakups and Performance of State Enterprises in Transition

Abstract
The paper analyzes the behavior of managers during restructuring of state owned enterprises (SOEs) in the period of price control. The massive wave of breakups of the SOEs that occurred in Czechoslovakia in 1990-91 has been investigated. A simple model that describes the process and yields testable predictions has been developed. The predictions of the model have been tested on firm level data set from 1990-91. The results of the empirical analysis enable us to draw policy-oriented conclusions about the behavior of the managers of the SOEs in such period.

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