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Fire the manager to improve performance? Managerial turnover and incentives after privatization in the Czech Republic
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Fidrmuc, Jana P. and Fidrmuc, Jan (2007) Fire the manager to improve performance? Managerial turnover and incentives after privatization in the Czech Republic. In: ESRC Workshop on Corporate Governance, Corporate Restructuring and Corporate Finance in Transistion Economies, Brunel Univ, London, England, 09-10 Sep 2005. Published in: Economics of Transition, Volume 15 (Number 3). pp. 505-533. ISSN 0967-0750. doi:10.1111/j.1468-0351.2007.00285.x
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Official URL: http://dx.doi.org/10.1111/j.1468-0351.2007.00285.x
Abstract
This paper analyses the effect of the introduction of managerial incentives and new human capital on enterprise performance immediately after privatization in the Czech Republic. We find weak evidence for the presence of managerial incentives: only from 1997, 3 to 4 years after privatization, does poor performance significantly increase the probability of managerial change. Nevertheless, replacing the managing director in a newly privatized firm improves subsequent performance. This indicates that the privatized firms operate below potential under the incumbent management. We show that the institutional framework matters as well: managerial turnover improves performance only if the management is closely interconnected with the board of directors and thus holds effective executive authority.
| Item Type: | Conference Item (Paper) | ||||
|---|---|---|---|---|---|
| Subjects: | H Social Sciences > HC Economic History and Conditions | ||||
| Divisions: | Faculty of Social Sciences > Warwick Business School | ||||
| Journal or Publication Title: | Economics of Transition | ||||
| Publisher: | Blackwell Publishing | ||||
| ISSN: | 0967-0750 | ||||
| Official Date: | July 2007 | ||||
| Dates: |
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| Volume: | Volume 15 | ||||
| Number: | Number 3 | ||||
| Number of Pages: | 29 | ||||
| Page Range: | pp. 505-533 | ||||
| DOI: | 10.1111/j.1468-0351.2007.00285.x | ||||
| Status: | Peer Reviewed | ||||
| Publication Status: | Published | ||||
| Access rights to Published version: | Restricted or Subscription Access | ||||
| Conference Paper Type: | Paper | ||||
| Title of Event: | ESRC Workshop on Corporate Governance, Corporate Restructuring and Corporate Finance in Transistion Economies | ||||
| Type of Event: | Workshop | ||||
| Location of Event: | Brunel Univ, London, England | ||||
| Date(s) of Event: | 09-10 Sep 2005 |
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