engleski

Corporate Restructuring and Performance in the Transition Process - The Case of Croatia

This paper deals with the problem of restructuring. It explores the sources and the scale of interventionism in the corporate sector, concentrating on financial aspects. After identifying the theoretical background a number of fundamental questions are being addressed. Has the financing of companies in troubles by direct state aid and soft loan conditions speeded up the process of privatization and increased their value? Has the efficiency, productivity and market performance of those companies been affected by state intervention? What are the general lessons to be learned for the process of restructuring? In the case of Croatian trasition there seems to be a paradox. The basic macroeconomics have been set right. The economy is stable as a whole, but on the microeconomic level the degree of instability is increasing. The conditions are such that in order to prevent mounting social dissatisfaction the government is increasingly intervening. Developed formal (the unios) and informal (political party network, especially with the ruling party) pressure groups are slowing down the changes and diminishing the rational use of resources available. Disparities in economic standards thus introduced on the micro level may become a source of social and political instability. The reaction is on the national government to improve the situation or to step down. The results achieved suggest a general conclusion, that the objectives od the privatization were not reached and that they have a negative impact from political, social and economis point of view. The real problem of restructuring remained unsolved. The major source for different allocations of government support was the debt/equity swap. It has elevated the pressure of debt to those enterprises but it has increased the financial risk of partners in such forced swaps. Occurred changes in the structure of ownership are negligible since they happened to be the horizontal ones only. The state directly or indirectly remained the major owner although its part dropped from 56.97 percent before the government support to 48.38 percent after the government support. The dispersion of ownership which occurred is the result of formal and by the government forced swap rather than real structural changes in the ownership. The restructuring process has a good chance only under five conditions: (1) fair and large scale privatization, (2) proper corporate governance, (3) improvement in governance of public companies, (4) sound banking system, (5) interest of foreign investors. Therefore, the role of the state is to implement a sound growth strategy with horizontal measures of support that would give a push to improved corporate governance and thus enter the post privatization deepening of the process of restructuring.

transition; corporate restructuring; privatization; state ownership; state intervention; losses; income; management; productivity; efficiency; liquidity; employment

nije evidentirano