This paper evaluates post-crisis effects of deleveraging policy in Slovenia. Increased collateralization, credit rationing, and a neglect of cash flow performance of banking clients drove reductions in banks’ credits to nonfinancial sectors. These jeopardized the normal deleveraging of companies with positive cash flows, and rolling over credits, which stifled economic growth. Erroneous sequencing, timing, and calibration of measures steering the deleveraging process generated these processes. Optimal deleveraging process demands that the Central Bank also focus on the stability of the financial system. This task should be a constitutional part of the third macro policy pillar, namely macroprudential policy.
In this paper we present and test a theory of how political connectedness (often linked to political corruption) affects corporate governance and productive efficiency of firms. Our model predicts that underdeveloped democratic institutions that do not punish political corruption result in political connectedness of firms that in turn has a negative effect on performance. Using the data on supervisory board structure, together with balance sheet and income statement data for 2000-2010, we show that a higher share of politically connected supervisory board members leads to lower productivity.
In this paper we evaluate the privatization process in Slovenia. We first present different models of privatization and compare their results by focusing on four transitional countries (Czech Republic, Hungary, Poland and Slovenia). Later on we show the drawbacks of Slovene privatization. Our analysis shows that the speed of the privatization is not the key question. More relevant is the transparency in the privatization process. In the paper we also argue that companies which are natural monopolies or have large network effects should not be privatised.
We provide the first test of and find support for the Hoff and Stiglitz (2004 a,b) model predicting under what conditions mass privatizations are accompanied by asset stripping. We also test and do not find support for the main prediction of the Campos and Giovannoni (2006) model. In addition to testing the theory, we tackle an important policy-oriented issue of why a large number of efficient firms disappeared during mass privatization in the booming economy of Montenegro. Econometrically, we present the first study to look at firms that disappeared during a mass privatization transition, improving upon prior studies that focused only on existing firms and ignored survival bias. Our analysis suggests that asset stripping and firm disappearance were present, and that asset stripping was a likely reason for the loss of efficient firms. We show that because more productive firms were liquidated, it is important to model survival bias in the selection of firms remaining in samples when estimating the effects of privatization or other ownership changes. We also show that one needs to distinguish between true start-ups and liquidated firms that re-appear as start-ups. In the absence of the rule of law, many firms that appear to have disappeared were in fact appropriated by managers and politically connected individuals.
We investigate the role of customer focus competencies of project teams in achieving a strategic intent of marketing in a company. In an exceptional reach study of more than 1500 teams in a construction company over the period 2006 – 2012, we found that the construction project teams with better customer focus competencies’ assessments perform better. We show that the entire team contributes evenly to the achievement of quality goals (conjunctive tasks), while team members with better customer competencies’ assessments contribute significantly more to the achievement of the budget and deadline goals (disjunctive tasks). We also provide support that the achievement of the budget and quality goals does not diverge during the crisis period compared to the pre-crisis period. However, the reduction of funds for investment projects during the crisis profoundly affected the deadline goal and the completion of projects. Finally, our research shows that when one or several team member perform more team roles, team performance is likely to improve, while the effects of team size on team performance are not conclusive.