Privatization

Info: 

Projekt poświęcony jest przetrwaniu przedsiębiorstw w warunkach znaczącego zaburzenia strukturalnego.

Na przykładzie przedsiębiorstw działających w Polsce w przededniu transformacji systemowej sprawdzamy czy przetrwanie i wzrost zależy od poziomu nieefektywnej alokacji czynników produkcji.


In this project we analyze the patterns of firm survival in the case of a large structural shock. Specific context of this process is provided by eventual misallocation of resources (e.g. excessive or insufficient K/L ratio). This was the situation of Polish state owned enterprises (SOEs) on the verge of transition from a centrally planned economy to a market one.

We verify if growth is predetermined by resources (mis)allocation. We interpret predetermination by the persistence of resources (mis)allocation.


Budget: 

Źródło finansowania | Financing : Narodowe Centrum Nauki, OPUS

Projekt realizowany | Timeline : 04/2015 – 10/2017

Budżet łączny | Total budget: 298 276 zł

  • wynagrodzenia dla podstawowych wykonawców | compensation to researchers: 78 600 zł
  • wynagrodzenia dla asystentów badawczych | compensation to research assistants: 63 000 zł
  • komputery i oprogramowanie (m.in. licencje STATA) | hardware and software (including STATA): 22 000 zł
  • konferencje i inne wyjazdy | conference travels: 51 000 zł
  • materiały + zakup danych  | usables + purchasing data: 35 800 zł
  • koszty pośrednie dla Wydziału Nauk Ekonomicznych | overheads for the Faculty of Economics: 23 023 zł
  • koszy pośrednie dla Uniwersytetu Warszawskiego | overheads for the University of Warsaw: 23 023 zł
Purpose: 

The main goal of the project is to analyze the patterns of firm survival in the case of a large structural shock. Specific context of this process is provided by eventual misallocation of resources (e.g. excessive or insufficient K/L ratio). This was the situation of Polish state owned enterprises (SOEs) on the verge of transition from a centrally planned economy to a market one.

With the exception of Czech case – which followed a very specific privatization program – to the best of our knowledge there is no empirical analyses concerning the entire census of plant-level data. Given the poor representativeness for SOEs for early years of transition in survey-based studies, our analyses will be unique.

Method

This is an empirical project (microeconometric), rooted in three strands of the literature: firm survival, privatization of SOEs and resources misallocation. During the course of the project we will conduct studies three types of analyzes. First, we intend to identify industry, cohort and regional extent of resource misallocation. Second, we aim to verify the link between the resource misallocation and growth within region and industry, decomposing the growth into part attributable to reducing misallocation and part attributable to total factor productivity (TFP) growth. The benchmark for TFP growth will be inferred from firm-level data on SOE incumbents from other CEECs and from firm-level data on private newly established firms (NEFs). Third, we hope to identify which firms should go into bankruptcy and which should not by the means of using the general link between region and industry-specific resource misallocation and unique data on the survival pre-transition SOE plants in Poland.


Głównym celem projektu jest analiza wzorców przetrwania przedsiębiorstw w sytuacji znacznego zaburzenia strukturalnego. W tej sytuacji ważna jest zmiana stopnia nieefektywności alokacji czynników produkcji (zbyt duża lub zbyt mała relacja kapitału do pracy). Miało to miejsce w przypadku polskich przedsiębiorstw państwowych w momencie zmiany systemu gospodarczego z gospodarki centralnie planowanej do gospodarki rynkowej.

Wedle naszej wiedzy, dotychczas nie przeprowadzono empirycznej analizy przedsiębiorstw państwowych na danych pochodzących z bazy o charakterze cenzusu. Wyjątkiem jest tutaj przypadek Czech, gdzie prywatyzacja miała bardzo specyficzny przebieg. Ze względu na słabą dostępność danych dla przedsiębiorstw państwowych w dostępnych zbiorów o charakterze ankietowym, proponowana analiza będzie unikalna. Ponadto, analiza obejmie naturalny eksperyment (transformację systemową), co pozwoli badać charakter reakcji na znaczące zaburzenie strukturalne.

Metodyka

Projekt ma charakter mikroekonometryczny, zakorzeniony w trzech nurtach literatury: dot. przetrwania przedsiębiorstw, prywatyzacji przedsiębiorstw państwowych a także literatury dot. nieefektywnej alokacji czynników produkcji. W ramach projektu zamierzamy zidentyfikować sektorową, kohortową oraz regionalną skalę nieefektywności alokacji zasobów (NAZ). Użyjemy unikalnego zbioru danych jednostkowych o pełnym cenzusie zakładów państwowych sprzed roku 1989, jak również innych zbiorów jednostkowych z czasów transformacji i późniejszych w celu zmierzenia stopnia nieefektywnej alokacji czynników produkcji.

In our search we sought to find plant-level information regarding liquidation/bankruptcy, manner of privatization, fragmentation, potential FDI and current status. We collected data from both court archives and from the Internet.

Internet Search Plant-level data from the Internet was collected in a threefold manner. First, we searched for information using accessible public records. Second, we searched for any relevant articles available in Polish newspapers as well as for information on a given company’s official website. Last, we used relevant keywords in Google searches to find any additional information.

  • In the beginning of our search, we found the appropriate identification numbers for a given firm, namely the REGON, NIP, and KRS. Using anyone of these three IDs, we were able to search for basic information about the firm (e.g. whether it is still active, and if not, when it stopped functioning) by inputting them into the engine on the Central Statistical Office’s website (Wyszukiwarka GUS) and, additionally, into third-party sites offering digital recordkeeping services (KRS-Online.com.pl and IMSiG). Information provided by these websites included the date of formation, date of liquidation, and the date of removal from the registry. Typically, a state-owned enterprise retained its ID when it was restructured and privatized. However, in some instances when the newly formed private company was not a direct continuation of the former SOE, it was registered as a completely new entity. This would, for example, happen when the new investor of the firm changed the business and production profile of the company. At the same time, a privatized SOE could be recognized as a completely new firm if other parts of its capital were sold off or liquidated. Since our data is plant level, we considered a newly established firm to be a continuation of an SOE when the plant specific to our database remained functioning following the restructuring.
  • If not all of the desired data could be attained through information linked to the aforementioned identification numbers, we searched for websites linked with the specific plant, firm or industry. Most existing firms with a websites feature some sort of “about us” section with relevant historical information. The detail with which the history of an existing plant was explained on a company website varied considerably, and therefore could not be taken as the sole means of identification for surviving plants. Further sources, mostly national and local newspapers, had to be used to gain deeper insight into the current status of some of the plants. Newspaper and media sources additionally contributed to information on liquidation and changes in ownership. For plants that were liquidated, restructured or privatized in the 1990’s and early 2000’s, we searched the digital archive of the Rzeczpospolita Newspaper (archiwum.rp.pl). Additionally, we searched for articles on gazeta.pl, wp.pl and naszemiasto.pl as well as appropriate local newspapers (whenever their digital archive was available). The local newspapers searched included: Dziennik Bałtycki, Dziennik Wschodni, Gazeta Lubuska, Głos Wielkopolski, as well as many other regional weeklies (in Polish: “Tygodnik”).
  • When the two previously mentioned methods failed to yield the information we desired, we did a basic Google search on the given plant/firm. The specific search terms were:
    • For matters of privatization: plant name* + “prywatyzacja” OR “podział” OR “inwestor” OR “FDI” OR “zagraniczny inwestor” OR “spółka akcyjna” OR “spółka skarbu państwa” OR “akcje” OR “sprzedaż”: (translated search terms: “privatization”, “division”, “investor”, “foreign investor”, “joint-stock company”, “treasury-owned enterprise”, “stock” and “sale”)
    • For matters of bankruptcy: plant name* + “upadłość” OR “likwidacja” OR “podział” OR “nierentowność” OR “sprzedaż mienia” OR “sprzedaż gruntu” OR “zamknięcie” (translated search terms: : “bankruptcy”, “liquidation”, “split”, “unprofitable”, “asset sale”, “property sale” and “closing”).
  • To ensure reliability of the information provided in the search results, we sought to find multiple sources that verified given facts about a plant. Only when a certain date or event was reported by two or more sources was it included in our dataset. These sources had to be independent of each other. In that, two websites that cited the same source could not be taken as two independent sources. Thus, only primary sources were considered factual.

Court Archives We collected data from the Regional Commercial Court in Warsaw (pol. “Sąd Okręgowy w Warszawie – Sąd Gospodarczy”). The registry of public firms (RPP- pl. Rejestr Przedsięborstw Państwowych) found in the court was used for information about the potential privatization or liquidation of state-owned enterprises. The records available in several regional courts were queried, but the procedure was not carried out for all regional courts because of its inefficiency. First, most of the information from the RPP is also available online in alternative sources (RPP holds the source documents, but the status has been recorded in a number of digital registries). Second, a large number of privatizations involved at initial stage a transformation from a state enterprise to a treasury-owned company (in Polish: jednoosobowa spółka skarbu państwa). Given that our interest encompasses the complete privatization process, RPP records conclude too early for many plants. Third, RPP contains information from a firm level, whereas our data are available at plant level.

Business Intelligence Following all of the above steps, we tried to fill in the gaps of our dataset by purchasing information from two business intelligence firms – a domestic and international one – whether they could find any information regarding the status, transformation, fate, employment or sales, of some of the plants for which we could not find information. Both of the publishers informed us they were unable to find any relevant information.

A (15) | B (20) | C (32) | D (11) | E (49) | F (44) | G (15) | H (18) | I (5) | J (5) | K (58) | L (16) | M (38) | N (3) | O (27) | P (72) | R (23) | S (43) | T (17) | U (15) | V (5) | W (32) | Z (75) | Ł (5)

Kopalnia Węgla Kamiennego „Borynia”
Węglowa 4, 44-268 Jastrzębie-Szeroka

Kopalnia Węgla Kamiennego „Budryk”
Zamkowa 10, 43-178 Ornontowice

Kopalnia Węgla Kamiennego „Czeczot”
Kopalniana 10, 43-225 Wola k. Pszczyny

Kopalnia Węgla Kamiennego „Halemba”
Kłodnicka 54,41-706 Ruda Śląska

Fabryka Koronek "Korontex"
Rzeszowska 10, 36-200 Brzozów

Fabryka Materiałów Ściernych "Korund"
Norton 1, 62-600 Koło

Fabryka Dywanów "Kowary"
Zamkowa 9, 58-530 Kowary

Fabryka Maszyn "Kowary"
Główna 1, 58-530 Kowary

Zakłady Drobiarskie "Koziegłowy"
Piaskowa 3, 62-028 Koziegłowy k. Poznania

Zakopiańska 72, 30-418 Kraków

Zakład Aparatury Kriogenicznej „Kriopan”
Muchoborska 18, 54-424 Wrocław

Zakłady Płyt Wiórowych
Waryńskiego 1, 78-400 Szczecinek

Krośnieńskie Huty Szkła
Tysiąclecia 13, 38-400 Krosno

Przedsiębiorstwo Produkcji Kruszywa i Usług Geologicznych
Mikołaja Reja 16, 35-959 Rzeszów

Fabryka Porcelany „Książ”
Uczniowska 21, 58-306 Wałbrzych

Zakłady Ceramiki Budowlanej - Zakład Kupno
Kupno 494, 36-100 Kolbuszowa

Daszyńskiego 64, 43-450 Ustroń

Kopalnia Węgla Brunatnego „Adamów”
Uniejowska 9, 62-700 Turek

Kopalnia Węgla Brunatnego „Bełchatów"
Rogowiec, 97-400 Bełchatów

Zakłady Naprawcze Przemysłu Węgla Brunatnego (KZN PWB)
Przemysłowa 85, 62-510 Konin

Zakłady Elektronowe „Unitra-Lamina”
Puławska 34, 05-500 Piaseczno

Zakłady Przemysłu Konfekcyjnego „Latona”
Łęczycka 44, 95-035 Ozorków.

Zakłady Mechaniczne „Legmet”
Złotoryjska 178-184, 59-220 Legnica

Legnickie Zakłady Metalurgiczne "Legnica"
Złotoryjska 194, 59-220 Legnica

Zakłady Górnicze Miedzi "Lena"
59-513 Wilków

Zakłady Przemysłu Pasmanteryjnego „Lenta”
Kilińskiego 228, 93-124 Łódź

Śląskie Zakłady Przemysłu Lniarskiego „Lentex”
Powstańców Śląskich 54, 42-700 Lubliniec

Zakład Przemysłu Lniarskiego "Lenwit"
Witaszyczki 66, 63-230 Witaszyce

Chłodnia Składowa
Długa Grobla 4A, 80-754 Gdańsk

Zakłady Porcelany Stołowej "Lubiana"
Zakładowa 1, 83-407 Łubiana

Zakłady Górnicze "Lubin"
Marii Skłodowskiej-Curie 188, 59-301 Lubin

Zakłady Okrętowe "Lubmor"
Wieleńska 1, 64-980 Trzcianka

Fabryczna 8, 67-321 Leszno Górne

Zakłady Aparatów Elektrycznych „Mera-Lumen”
Słubicka 1, 65-127 Zielona Góra

Lubskie Zakłady Przemysłu Wełnianego "Luwena"

Zakłady Przemysłu Dziewiarskiego „Luxpol”
Pierwszej Brygady 35, 73-110 Stargard Szczeciński

W toku | Work in progress

  • Structural change and misallocation. Firm-level evidence from Poland

    Early transition literature linked large number of firm failures with the inability to overcome the pre-transition misallocation of resources, i.e. the inadequate capital-labor ratio. We look at the link between misallocation and firm survival using a rich firm-level dataset of over 1600 manufacturing plants established in a centrally planned economy after 1945. Our duration models include the standard Olley-Pakes misallocation measures as well as firm-level counterfactual level of capital that takes into account the present day market allocation and productivity. We show that i) misallocation was rather a firm-level than sector-level phenomenon and more importantly ii) it did not have a sizeable effect on the actual firm survival. Moreover, privatization tends to be negatively related to firm survival. This may imply both inappropriate self-selection into privatization programs and possibly inadequate implementation of the privatization.

    Joanna
    Tyrowicz
    Jan
    Hagemejer
  • Misallocations go a long way: evidence from firm-level data

    We analyze the link between resource misallocation and subsequent long-run economic growth. We use two unique and novel sources of data for Poland and measure misallocation inherited from the period of central planning, i.e. period where input prices did not determine the use of inputs at firm, industry and country level. We assess sectoral, regional and cohort dimension of the inputs misallocation. We then show that undercapitalization was more prevalent that overcapitalization, and that it was due mostly to the firm and sector level variation in factor inputs. Given this insight, subsequent reallocation of the resources required shifting of inputs not only between firms, but also between sectors: a process which is relatively more prone to frictions due to specialization and information. When analyzing the link to the rate of growth once market mechanisms were reinstated, we find that regions with more misaligned firms (especially in terms of undercapitalization) experienced lower subsequent economic growth. This result proves highly robust, even three decades since the market mechanisms were reinstated.

    Joanna
    Tyrowicz
    Jan
    Hagemejer
    Peter
    Szewczyk
  • Are rushed privatizations substandard? Analyzing firm-level privatization under fiscal pressure

    In this paper we provide the first analysis of whether rushed privatizations, usually carried out under fiscal duress, increase or decrease firms’ efficiency, scale of operation (size) and employment. Using a large panel of firm-level data from Poland over 1995-2015, we show that rushed privatization has negative efficiency, scale and employment effects relative to non-rush privatization. The negative effect of rushed privatization on the scale of operations and employment is even stronger than its negative effect on efficiency. Our results suggest that when policy makers resort to rushed privatization, they ought to weigh these negative effects against other expected effects (e.g. on fiscal revenue).

    Joanna
    Tyrowicz
    Jan
    Hagemejer
    Jan
    Svejnar