In theory, the method employed to transfer ownership from public to private hands is a secondary concern. But when the legal-institutional environment is weak, the method of sale matters greatly. The experiences of the transition economies have taught us that different forms of sales methods produce very different types of owners, who vary greatly in their commitment to, and ability to carry out restructuring (meaning the changes required to allow the firm to survive in a competitive market setting). The method of privatization is thus an important factor in determining1 an efficient allocation of ownership rights.
Goldberg, I. and Nellis, J. (2007), "Chapter 8 Methods and Institutions – How do They Matter?: Lessons from Privatization and Restructuring in the Post-Socialist Transition", Lieberman, I. and Kopf, D. (Ed.) Privatization in Transition Economies: The Ongoing Story (Contemporary Studies in Economic and Financial Analysis, Vol. 90), Emerald Group Publishing Limited, Bingley, pp. 345-370. https://doi.org/10.1016/S1569-3759(07)00008-3Download as .RIS
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