We provide the first test of and find support for the Hoff and Stiglitz (2004a,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.
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. We test this prediction on an almost complete population of Slovenian joint-stock companies with 100 or more employees. 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.
Debates about competitiveness and productivity are practically unexplored with respect to tourism. This article posits a productivity-related measure—total tourism contribution to GDP per employee in tourism—in order to examine destination competiveness. Comprehensive results based on a destination competitiveness model are obtained by analyzing tourism-specific and wider economy-based competitiveness factors. These are represented by six destination competitiveness factors measured by 55 indicators for 139 destinations over the period 2007–2011. The study offers a novel approach in the operationalization and estimation of a theoretically grounded and empirically validated tourism competitiveness model and discusses the implications for tourism policy.
Building on social identity theory, this study develops and tests—in two countries—a conceptual model that assesses the relative influence of consumer ethnocentrism, national identity, and consumer cosmopolitanism on consumers' product judgments and willingness to buy domestic and foreign products. The findings reveal several undiscovered patterns regarding the interplay of consumer ethnocentrism, national identity, and consumer cosmopolitanism as drivers of consumer behavior and offer managerial guidance on their relevance as segmentation variables.
The paper identifies 25 different (legal) causes of higher transaction cost that impact prosperity and growth. Empirically, the paper tests the relationship in a sample of 139 economies between 2003 and 2014. The econometric tests confirm a robust impact of higher transaction cost on (lower) economic growth in the long run.