Ownership Structure and Enterprise Restructuring in Hungary

Dominant Ownership and Restructuring Indicators



data Source: World Bank survey, excerpted in EBRD Table 8.7.

This table shows how restructuring outcomes vary by the type of dominant enterprise owner. The data are from a World Bank survey of 200 Hungarian manufacturing enterprises. An ownership type is classified as dominant ownership type for an enterprise if it owns more than 50% of the enterprises' shares. There may be dispersed ownership among owners of a particular type. Such dispersal would be expected to reduce restructuring incentives.

The table shows a sharp contrast between reactive change and strategic change by ownership type. Enterprises with dominant foreign ownership and de novo enterprises had relatively high employment growth, real wage growth, sales growth, and labor productivity growth. However, they had a relatively low level of exports outside the former Soviet trading block (CMEA), and relatively little growth in such exports since 1989. In contrast, enterprises with dominant state ownership, insider ownership, or domestic outside ownership had relatively low employment growth, real wage growth, sales growth, and productivity growth. They showed, however, stronger orientation toward new world markets.


topic Enterprise Restructuring in the FSU