The big sell: privatizing East Germany's economy


Hennicke, Moritz ; Lubczyk, Moritz ; Mergele, Lukas


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URL: https://madoc.bib.uni-mannheim.de/57727
URN: urn:nbn:de:bsz:180-madoc-577270
Document Type: Working paper
Year of publication: 2020
The title of a journal, publication series: ZEW Discussion Papers
Volume: 20-043
Place of publication: Mannheim
Publication language: English
Institution: Sonstige Einrichtungen > ZEW - Leibniz-Zentrum für Europäische Wirtschaftsforschung
MADOC publication series: Veröffentlichungen des ZEW (Leibniz-Zentrum für Europäische Wirtschaftsforschung) > ZEW Discussion Papers
Subject: 330 Economics
Classification: JEL: D24 , G38 , H11 , L33 , P31,
Keywords (English): privatization , labor productivity , German reunification
Abstract: The end of communism in the 1990s probably is the most fundamental restructuring ofinstitutions witnessed in recent history. At its core was the large-scale redistribution of previouslystate-owned companies. We construct a unique firm-level dataset to study this redistribution in East Germany where the entire state-owned economy was either privatized or liquidated withinless than five years. We examine whether the privatization authority followed its mandate toprivatize competitive firms using initial labor productivity to indicate firms’ competitiveness.Our results highlight that firms with higher baseline productivity are more likely to be privatized,yield higher sales prices, are more often acquired by West German investors, and are more likelyto remain in business even 20 years after leaving public ownership. The privatization agencyplausibly contributed to these outcomes by rating and prioritizing productive firms.

Das Dokument wird vom Publikationsserver der Universitätsbibliothek Mannheim bereitgestellt.




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