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Eastern Europe's enterprises are undergoing various forms of
corporate restructuring. Some governments are undertaking restructuring
before privatization, some delegate restructuring to private-sector
institutions before offering shares to the public, and others are making
public share offers before restructuring. In Discussion Paper No. 700, Wendy
Carlin and Programme Director Colin Mayer argue that the
recent theoretical literature on corporate ownership and vertical
integration points to four factors as central to the reform process:
incomplete contracts between the state, investors and managers;
complementarity between the assets of different stakeholders; the
relative importance of assets; and the relative abilities of different
stakeholders. They document in some detail the privatization process in
East Germany and consider its implications for the rest of the region. |
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