Privatization and Survival – Evidence from a Russian Firm Survey
This study is dedicated to an important aspect of the long-run performance of firms, namely their survival under rapidly changing conditions in a transition economy. The analysis is focused on the question whether privatization and ownership structure have affected the likelihood of liquidation and bankruptcy of firms in Russia. We use a sample of 497 privatized and non-privatized firms that have been surveyed in 1999-2000, and for which information about their survival status and reasons for exit such as bankruptcy, mergers and court decisions has been collected. More than 38 per cent of the sample firms are liquidated over the period from 1999 to 2013. We find that privatization and the choice of privatization option have no effect on the long-term survival of firms in Russia, but that managerial ownership lowers the likelihood of both liquidation and bankruptcy. Other transition-specific predictors of bankruptcy, such as the extent of price controls and the amount of wage arrears affect firm exit in a significant way.