The Determinants of Asset Stripping: Theory and Evidence from the Transition Economies

38 Pages Posted: 23 May 2006

See all articles by Nauro F. Campos

Nauro F. Campos

University College London; University of Michigan at Ann Arbor - The William Davidson Institute; IZA Institute of Labor Economics

Francesco Giovannoni

University of Bristol - Department of Economics

Multiple version iconThere are 3 versions of this paper

Date Written: August 2005

Abstract

During the transition from plan to market, managers and politicians succeeded in maintaining control of large parts of the stock of socialist physical capital. Despite the obvious importance of this phenomenon, there have been no efforts to model, measure and investigate this process empirically. This paper tries to fill this gap by putting forward theory and econometric evidence. We argue that asset stripping is driven by the interplay between the firm's potential profitability and its ability to influence law enforcement. Our econometric results, for about 950 firms in five transition economies, provide support for this argument.

Keywords: Asset stripping, law enforcement, corruption, transition

JEL Classification: H82, K42, O17, P26, P31

Suggested Citation

Campos, Nauro F. and Giovannoni, Francesco, The Determinants of Asset Stripping: Theory and Evidence from the Transition Economies (August 2005). William Davidson Institute Working Paper No. 786, Available at SSRN: https://ssrn.com/abstract=903809 or http://dx.doi.org/10.2139/ssrn.903809

Nauro F. Campos (Contact Author)

University College London ( email )

Gower Street
London, WC1E 6BT
United Kingdom

University of Michigan at Ann Arbor - The William Davidson Institute

724 E. University Ave.
Wyly Hall
Ann Arbor, MI 48109-1234
United States

IZA Institute of Labor Economics

P.O. Box 7240
Bonn, D-53072
Germany

Francesco Giovannoni

University of Bristol - Department of Economics ( email )

Priory Road Complex Priory Road
University of Bristol
Bristol, BS81TU
United Kingdom
+44 117 928 8430 (Phone)
+44 117 928 8577 (Fax)

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