Restructuring of firms in transition: ownership, institutions and openness to trade

Abstract

We develop a theoretical framework for defensive and strategic restructuring, and provide estimates of restructuring in privatized firms in an advanced transition economy: Slovenia. Our rich data point to both types of restructuring, as well credit rationing and bargaining with respect to investment. Privatized firms display profit-maximizing behavior, and a firm's export orientation and institutional features, such as insider vs outsider privatization, employee ownership, and employee control, do not affect the firm's employment and investment behavior. The results suggest that a major exposure to world competition induces similar economic behavior in firms with different structural and institutional characteristics. Journal of International Business Studies (2008) 39, 725–746. doi:10.1057/palgrave.jibs.8400379

Corporate distress and turnaround: integrating the literature and directing future research

“…3 Turnaround under corporate distress-research framework commonly used to classify turnaround actions (DeWitt 1993;Domadenik et al 2008;Lim et al 2013). The theoretical framework is developed based on organizational change theory, which can generally be divided into content, process, and context research.…”

“…Despite the multitude of preceding and adjacent stages offered in literature, studies analyzing turnaround success focus on measurable implementation phases that can be summarized under the aforementioned two stages. Consequently, turnaround activities under distress can be divided as either ''defensive'' or ''belt tightening,'' and ''strategic'' or ''stabilizing'' (Arogyaswamy et al 1995;DeWitt 1993;Domadenik et al 2008;Hambrick and Schecter 1983;Pearce and Robbins 1993). Further, the sense-making and communication strategy of distinct turnaround strategies depend on their respective process stages during the crisis (Balogun and Johnson 2004;Maitlis and Sonenshein 2010;Vaara et al 2006).…”

Institutional development and firm profitability in transition economies

“…Because firms in internationally open countries are disciplined by global market dynamics to a greater extent than firms in less open countries, adopting global business standards and practices becomes a necessity. Hence, the exposure of firms to international markets induces their restructuring (Domadenik, Prašnikar, & Svejnar, 2008).…”

Competing in (and out of) transition economies

“…Despite uneven progress across countries, the social, political, legal, and economic infrastructures have been going through tremendous transformations (Uhlenbruck, Meyer, & Hitt, 2003). The revolutionary changes in the institutional and macroeconomic structure combined with the threat of competition by MNEs have compelled many DFs to undertake serious changes despite the risk of institutional upheaval (Domadenik, Prašnikar, & Svejnar, 2008;Newman, 2000). MNEs have also been going through a transformation process in response to the institutional transitions and the corresponding transformation of the domestic rivals (Luo, 2007).…”