OWNERSHIP AND PARTICIPATION: A REVIEW OF EMPIRICAL EVIDENCE FOR TRANSITION ECONOMIES

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.