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Discussion Paper Details

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Title: The Enterprise Isolation Programme in Romania

Author(s): Simeon Djankov

Publication Date: April 1999

Keyword(s): Financial Distress, Isolation Programme and Romania

Programme Area(s): Transition Economics

Abstract: We provide comprehensive analysis of the isolation program for financially distressed firms in Romania. The results indicate that the isolation program did not deliver any tangible improvements in operational performance, nor did it enhance the process of privatization or liquidation of large loss-making enterprises. Firms included in the program faced softer budget constraints than their comparators outside the program, and few management changes in poorly performing firms took place. These findings question the feasibility of creating successful programs for enterprise restructuring under government auspices.

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Bibliographic Reference

Djankov, S. 1999. 'The Enterprise Isolation Programme in Romania'. London, Centre for Economic Policy Research. https://cepr.org/active/publications/discussion_papers/dp.php?dpno=2131