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Book part

Rustam Jamilov and Yusaf H. Akbar

This paper introduces the readers to Neo-Transitional Economics – a volume which aspires to reinvigorate scholarly interest in transition economics research. The classical…

Abstract

This paper introduces the readers to Neo-Transitional Economics – a volume which aspires to reinvigorate scholarly interest in transition economics research. The classical transition storyline is briefly revisited, and new directions for empirical and policy-relevant research that target post-transition economies in the post-crisis paradigm are highlighted.

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Book part

Desalegn Abraha and Akmal S. Hyder

The purpose of this chapter is to introduce emerging markets (EMs) and then European transition economies in which alliance transformation takes place. Considering the…

Abstract

The purpose of this chapter is to introduce emerging markets (EMs) and then European transition economies in which alliance transformation takes place. Considering the complexity of EMs, researchers and academics feel pressure in recent years to seek comprehensive understanding of the EM context (Kumar and Srivastava, 2019). Transition economies are a special category of EMs, which have attracted many multinational firms to invest after the fall of Berlin wall in the beginning of 1990s. This region constitutes of former soviet bloc, located in central and eastern Europe. After a short introduction and discussion on the importance on EMs, development process within EMs is taken up. Transition economies are then introduced, particularly in relation to their link with the European Union. Aims and research questions are outlined to display the objective and direction of the study. The next section discusses major contributions, followed by limitations of the study describing what issues are left out to concentrate on the research object. Finally, it is shortly described what other chapters are coming and what they deal with.

Details

Transformation of Strategic Alliances in Emerging Markets, Volume I
Type: Book
ISBN: 978-1-80043-745-6

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Article

Peter Hardi and Krisztina Buti

In Central Eastern Europe (CEE) the transition to market democracy significantly influenced the emerging corporate governance practice. The region, however, demonstrates

Abstract

Purpose

In Central Eastern Europe (CEE) the transition to market democracy significantly influenced the emerging corporate governance practice. The region, however, demonstrates much more diversity in corporate governance than expected in generally similar transition economies and the variables and their impacts only partially overlap with the variables of corporate governance in other regions. This research aims to focus on how to help discover and explain these similarities and differences.

Design/methodology/approach

This paper is a review of the secondary literature. The review is carried out with the intention of providing an opportunity to map out new terrains or provide critiques of the direction of a research field. The majority of literature reviewed in the paper is published in refereed journals, but other resources like book chapters, conference papers, reports and in certain cases unpublished materials are added. The paper discusses the key topics and variables according to the requirements of a holistic approach to corporate governance.

Findings

The review of available literature indicates that much work has been done on a significant set of variables of corporate governance, both in the domestic (privatization and the legal environment primarily, institutions and market conditions secondarily) and the international (impact of foreign direct investment, European Union directives and expectations, globalization and global institutions like OECD and the WB) context, but this body of research has not been discussed comparatively, within the context of a holistic model. Existing literature in the first two decades after transition has devoted less attention to issues of hierarchy and institutions of corporate governance, although they have relevance to better understand the impact of the macro‐level factors on corporate governance practices and their differences in the region. The paper has indicated the importance of a systematic review of macro‐level factors, both internal and external from a national perspective, influencing corporate governance practices.

Research limitations/implications

A systematic review of the variables of corporate governance in CEE has been missing to date and the theoretical framework adequate for pursuing such research is emerging only recently. The further elaboration and application of a holistic approach is necessary to analyze the numerous aspects that influence and shape corporate governance structures and practices in transition economies and to understand the differences that prevail even after two decades of transition to market democracy.

Originality/value

The paper provides a comprehensive review of the literature on corporate governance practices and the factors influencing the emergence and impact of those codes in CEE. It argues for a holistic approach not applied before in the research of corporate governance in transition economies; and discusses the role of external and domestic macro‐level factors in explaining the differences in the emerging national practices. It emphasizes the importance of the holistic analysis in future research.

Details

Corporate Governance: The international journal of business in society, vol. 12 no. 1
Type: Research Article
ISSN: 1472-0701

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Book part

Derek C Jones

We find that: (i) substantial insider ownership persists, though majority ownership by non-managerial employees is eroding fast; (ii) flexible pay systems and…

Abstract

We find that: (i) substantial insider ownership persists, though majority ownership by non-managerial employees is eroding fast; (ii) flexible pay systems and state-mandated forms of employee representation are becoming more common; and (iii) while increased employee influence is sometimes apparent, privatization often does not produce fundamental changes in inherited patterns of corporate governance.The evidence of the impact upon enterprise productivity indicates: (i) no persuasive evidence that a single form of private ownership is most efficient or that the key obstacle to enhanced performance is employee participation in economic returns; (ii) some evidence that employee participation enhances business productivity; (iii) limited evidence that employee participation boosts the effect of employee ownership and employee participation in profits; and (iv) a role for ownership dynamics as well as changes in patterns of influence in accounting for the determinants of differences in labor productivity. Thus it appears that widely differing ownership structures may be most appropriate when institutional contexts vary.

Details

Employee Participation, Firm Performance and Survival
Type: Book
ISBN: 978-0-76231-114-9

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Article

Vera Adamchik, Thomas Hyclak and Arthur King

Analyzes the wage structure and wage distribution for male and female Polish workers during a more mature phase of a transition to a market economy, namely 1994‐2001. The…

Abstract

Analyzes the wage structure and wage distribution for male and female Polish workers during a more mature phase of a transition to a market economy, namely 1994‐2001. The results indicate an overall rise in earnings inequality for both genders during this period. Contrary to conventional expectations, changes in the composition of employment caused by a deep restructuring process did not have a significant impact on earnings inequality. Throughout this period, the changes in the wage structure and wage distribution were almost entirely due to the changes in returns to worker characteristics. However, does not observe the “explosion of differentials at all levels,” predicted by many leading models on transition. Wage structures for men and women evolved in different ways. This analysis suggests that the effect of changes in labor supply and institutional factors on the wage structure and wage distribution was relatively unimportant. Demand side factors seem to be far more important in explaining the dynamics of earnings inequality in Poland during 1994‐2001.

Details

International Journal of Manpower, vol. 24 no. 8
Type: Research Article
ISSN: 0143-7720

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Article

Merita Zulfiu Alili and Nick Adnett

The last two decades have been characterised by a rise in income and wage inequality in a wide range of countries, including European transition countries. The rise in…

Abstract

Purpose

The last two decades have been characterised by a rise in income and wage inequality in a wide range of countries, including European transition countries. The rise in globalisation is one major factor explaining this increasing wage inequality. International trade and FDI have increased significantly since the beginning of transition and the purpose of this paper is to focus on whether FDI plays an important role in explaining the pattern of wage inequality in selected transition countries.

Design/methodology/approach

A cross-country empirical investigation has been conducted using two alternative measures of wage inequality: the Gini coefficient and the Theil index. Several model specifications and estimation strategies have been employed to obtain consistent estimates and to check for the robustness of the results.

Findings

The results indicate that a rising share of inward FDI in gross domestic product (GDP) increased wage inequality in transition economies, though its overall effect was relatively small. Considering the long run, there is no clear evidence of a concave relationship between FDI and wage inequality, which may be a consequence of the relatively low levels of FDI in many transition countries.

Practical implications

Inwards FDI has made a small contribution to increasing wage inequality in European transition economies. However, its overall beneficial effects on labour markets in these countries suggest that rather than restricting FDI governments should target increasing the supply of skilled labour.

Originality/value

This new empirical evidence supports the hypothesis that an increased inward FDI stock as a share of GDP increases wage inequality in transition economies, however, this relationship is a complex one. Differences in average wages, wage differentials, employment shares of skilled workers and relative size of the foreign-owned sector are all likely to be important for the behaviour of wage inequality.

Details

International Journal of Social Economics, vol. 45 no. 9
Type: Research Article
ISSN: 0306-8293

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Article

Maria Aluchna and Bogumil Kaminski

The purpose of this paper is to investigate the links between company ownership structure and financial performance in the context of the largest Central European stock…

Abstract

Purpose

The purpose of this paper is to investigate the links between company ownership structure and financial performance in the context of the largest Central European stock market. Using the framework of agency theory, the authors address the question of the expropriation effect by dominant owners and the effect of collusion between shareholders of different types on company performance.

Design/methodology/approach

The authors test hypotheses on the relations between ownership concentration and the involvement of different shareholders (state, CEO, industry and financial investors) vs return on assets (ROA). The authors adopt the panel model controlling for endogeneity and sector of operation and analyze the data from the unique sample of 495 Polish non-financial firms listed on the Warsaw Stock Exchange in years 2005-2014 with a total of 3,203 observations.

Findings

The authors identify a negative correlation between ownership concentration by the majority shareholder and ROA, which corresponds with the expropriation rationale of blockholders. The authors also observe negative effects due to ownership concentration by the second largest shareholder, supporting the notion of collusion. The results show that ownership by industry investors is associated with a higher ROA. Ownership by the CEO, state and financial investors proves to have no statistically significant effect on performance.

Originality/value

The paper further develops the nature of ownership-performance relations in the specific economic context of a post-transition, emerging European stock market, weak external corporate governance mechanisms, insufficient investor protection and significant concentration of share ownership. The results add to the understanding of monitoring vs expropriation effects by large owners and the collusion between different types of shareholders.

Details

Baltic Journal of Management, vol. 12 no. 4
Type: Research Article
ISSN: 1746-5265

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Book part

Mikhail A. Sherstnev

The development of the Russian banking sector was subject to numerous criticisms and pessimistic forecasts in the recent years. The observers pointed out the low ability…

Abstract

The development of the Russian banking sector was subject to numerous criticisms and pessimistic forecasts in the recent years. The observers pointed out the low ability of the Russian banking sector to provide financial intermediation in the economy and thus to perform the key functions which society expects from the banking sector – mobilization of savings and financing investments in the real sector of the economy. The study seeks to explain above-mentioned features from institutional, economic, and political perspective on the basis of the existing knowledge of the nature of transition banking.

Details

Credit, Currency, or Derivatives: Instruments of Global Financial Stability Or crisis?
Type: Book
ISBN: 978-1-84950-601-4

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Article

Thomas Lange

This paper aims to contribute to the growing body of empirical evaluations of workers' subjective well being by assessing the impact of values, beliefs, important job…

Abstract

Purpose

This paper aims to contribute to the growing body of empirical evaluations of workers' subjective well being by assessing the impact of values, beliefs, important job attributes and autonomous institution building on employees' job satisfaction across ten countries in Central and Eastern Europe.

Design/methodology/approach

Data derived from the European Values Study 1999/2000 is being utilised, which provides detailed information not only on job satisfaction and socio‐demographic characteristics, but also on individuals' subjective views, beliefs and important job attributes. Following a descriptive narrative on the transformation in emerging market economies, ordered probit regressions are performed to determine the significance of these characteristics, values and beliefs on workers' job satisfaction.

Findings

The empirical findings suggest that reported attitudes, values and beliefs and their impact on job satisfaction evince traits of a legacy of communist industrial relations as well as subsequent experiences with economic and social transition. What is more, the study also uncovers the positive influence of trust and confidence in autonomous institution building on workers' job satisfaction, specifically in the context of reformed trade unions, education and social security.

Originality/value

In previous studies, job satisfaction has been examined primarily in Western Europe and the USA. In contrast, empirical examinations to identify the determinants of job satisfaction for employees in Central and Eastern Europe have not figured prominently in this literature. This paper adds value by providing robust empirical results for this region.

Details

Employee Relations, vol. 31 no. 1
Type: Research Article
ISSN: 0142-5455

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Book part

João Sousa Andrade and António Portugal Duarte

The main aim of this chapter is to analyse whether recent economic developments in Central and Eastern European countries have been subjected to a typical process of Dutch…

Abstract

The main aim of this chapter is to analyse whether recent economic developments in Central and Eastern European countries have been subjected to a typical process of Dutch Disease (DD). We investigate the impact of foreign aid and other external inflows on the economies of these countries through their effect on the real exchange rate (RER).

After a review of the literature on the DD, we apply robust new generation augmented Dickey-Fuller (ADF) tests, and autoregressive distributed lag models following the methodology of Arellano and Bond (1991) and Blundell and Bond (1998) to establish the impact of capital inflows on output growth for the period 2003–2013.

We find no significant role for financial costs in the determination of the RER in the integration process of these countries. The evidence supports a positive influence of external capital inflows, and in particular European structural funds, on the determination of RER. This positive influence also extends to non-tradable goods and public investments.

In order to promote medium-long run sustainability, Central and Eastern European countries should carefully apply European funds in a way that does not bring about higher internal prices, or, if possible, control the nominal exchange rate in accordance. They must invest more in the higher qualification of human resources, research and development, innovation, entrepreneurship and industrial clusters, in view of the development of the tradable sector.

It is the first chapter that analyses the presence of DD originated by European structural funds and external inflows of funds for this group of countries.

Details

Core-Periphery Patterns Across the European Union
Type: Book
ISBN: 978-1-78714-495-8

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