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Using a unique sample of 444 entrepreneurial IPOs in the UK and France this paper examines links between founders' characteristics, venture capital (VC) syndication and the development of effective boards in entrepreneurial firms. It argues that VC-backed IPOs suffer from two sets of agency problems which are related to principal-agent and principal-principal relationships between the founders and members of the VC syndicate. The empirical evidence shows that there is a curvilinear relationship between the intensity of founders' external ties and VC syndication. Founders' retained share ownership is negatively associated with VC syndication. We also find that in syndicated IPOs there is a higher involvement of passive private equity firms and “business angels” investing alongside VC firms, both in terms of their number and equity presence. VC-syndicated IPOs have more independent boards than IPOs with no VC involvement. Board independence is negatively associated with founders' retained equity. These results are consistent with the assumption that board independence is used to mitigate agency costs associated with VC involvement in IPO firms. Our findings also identify significant differences in governance characteristics between the UK and France. While French IPOs have less independent boards, they involve more VC backing in general and syndicated VC funding in particular, than UK IPOs.

This paper employs structural equation modeling to examine the relations between corporate governance, managers' independence, exporting and performance of companies in Poland and Hungary. It is fo...

This review and introduction to the Special Issue on ‘Strategy Research in Emerging Economies’ considers the nature of theoretical contributions thus far on strategy in emerging economies. We classify the research through four strategic options: (1) firms from developed economies entering emerging economies; (2) domestic firms competing within emerging economies; (3) firms from emerging economies entering other emerging economies; and (4) firms from emerging economies entering developed economies. Among the four perspectives examined (institutional theory, transaction cost theory, resource-based theory, and agency theory), the most dominant seems to be institutional theory. Most existing studies that make a contribution blend institutional theory with one of the other three perspectives, including seven out of the eight papers included in this Special Issue. We suggest a future research agenda based around the four strategies and four theoretical perspectives. Given the relative emphasis of research so far on the first and second strategic options, we believe that there is growing scope for research that addresses the third and fourth.

By building on a knowledge-based view of the firm, this paper addresses a relatively unexplored area of roles and dynamics of corporate governance in younger, threshold firms that are undergoing a transition from the emergence to the professional management stage. Our analysis is focused on the process of capability development, exploring the effect of the asymmetry in knowledge that often exists between directors and senior managers on the governance of threshold firms. We examine the key sources of this asymmetry, explore ways directors and senior executives learn, and then discuss the implications of this learning on the evolution of governance systems in the threshold firm.

This paper focuses on the links between governance, firm capabilities and restructuring following the large-scale privatization process in Central and Eastern European transition economies using an integrative approach. Restructuring in these countries has been motivated by political and institutional changes and less so by market forces. Accordingly, political processes have produced political solutions such as “give-away” privatizations to insiders. These privatizations, in contrast to divestitures to outside owners, have realized less substantive restructuring because non-market incentives, such as too much managerial equity ownership, have created managerial entrenchment. In addition, we propose a connection between governance and organizational learning suggesting that learning is inhibited by excessive managerial ownership and lack of board knowledge regarding its oversight function. Furthermore, this entrenchment and poor board functioning may be perpetuated in financial-industrial groups, which have emerged as substitutes for market intermediaries in emerging economies. Thus, we propose that outside ownership involvement and the development of organizational capabilities may facilitate restructuring in the Central and Eastern European context. Our theoretical arguments are supported by case study evidence from transition economies.

In the context of privatization and restructuring in Russia, we test two standard agency theory hypotheses, namely, (1) outside board members and (2) new managers are positively related to firm performance. Based on a survey of 314 privatized firms, the evidence offers little support for the hypotheses. Historically, results refuting theories have been launch pads for scientific progress. Our findings, therefore, raise interesting questions about whether the underlying theory is appropriate, whether there are methodological problems, or whether there are institutional factors in Russia’s transition economy that need to be accounted for when we test agency theory in a new setting. We address these questions and discuss their implications for corporate governance theory, practice, and public policy.

Building on the strategic flexibility perspective, this paper examines the influences of organizational diversity, ownership structure and board characteristics on strategic responses to industrial decline in firms from the UK textile industry. Using samples of exiting and surviving companies it shows that, in line with the predictions of the strategic flexibility framework, the surviving companies tended to have a higher level of organizational diversity. They also tended to have larger institutional ownership and more diverse boards. These factors are associated with higher investment, financial performance, and growth. The results are consistent with the resource and service roles of the corporate governance factors.

Researchers and potential investors in transition economies need to understand the Human Resource Management (HRM) strategies of target firms, since human resources are arguably their most valuable assets. Understanding is difficult, however, because HRM strategies help to determine firms' performance, but are in turn influenced by corporate governance, particularly insider ownership. This paper employs a structural equation modeling methodology to examine the relations between governance, HRM strategies and performance in the context of a novel dataset of Ukrainian industrial firms. It is found that insider ownership is positively associated with high-commitment HRM strategies and negatively with low-commitment, cost-cutting HRM strategies. Cost-cutting HRM strategies are in turn associated with weaker firm performance. These outcomes correspond broadly with theoretical expectations. Journal of International Business Studies (2003) 34, 530–549; doi:10.1057/palgrave.jibs.8400065

Alternative forms of disciplining the actionsof senior enterprise managers can becharacterized as shareholder or stakeholdergovernance. This paper analyzes thecontingencies that favour different forms ofgovernance and addresses the question: doesRussia need a stakeholder-oriented model ofcorporate governance? The appropriateness ofdifferent governance regimes under variouscontingent situations are analyzed both ingeneral and with respect to Russia. We suggestthat contingent factors argue for theco-existence of two different governancemechanisms in Russia based on sectoraldifferences. Survey evidence is used to examinepatterns of Russian bank, employee and Statestakeholding behaviour and shows that, apartfrom managers, these stakeholders at present donot have a significant involvement indecision-making in the majority ofmanufacturing firms. Given institutionalweaknesses in Russia, a case may be made forthe State to have a role to play incounterbalancing dominant insider shareholdersand enforcing good corporate governanceprinciples.

There has been a substantial debate about the benefits rationalisation might have conferred on British manufacturing during the interwar years. One industry which has featured prominently is the Lancashire cotton-textile industry. This article assesses the validity of John Maynard Keynes’ claim that the industry failed to restructure because the banks as debt holders prevented firms exiting the industry, creating persistent over-capacity. Since the 1980s, more recent literature has noted an association between block shareholdings and successful corporate restructuring. Despite the prominence of block shareholdings in the Lancashire case, their role has attracted little attention as a potential counterweight to the dominance achieved by the Keynesian narrative in the historiography of cotton, notwithstanding the concerns of other inter-war commentators about the role of financial syndicates and ‘unsound finance’. The paper uses archival evidence to investigate the composition of share ownership and develops hypotheses to test the role of particular types of block holding. The results show that syndicates of local shareholders, not the banks, were an important impediment to the exit of firms. Moreover, syndicates milked firms of any profits through dividends, thereby limiting reinvestment and re-equipment possibilities. Our theoretical results show that where laissez-faire fails in response to a crisis, incumbent investors, particularly block-holders, can be an important impediment to corporate restructuring.

1 IntroductionIn recent years, there has been a rapid growth in a large range of investmentmanagers that represent alternatives to traditional equity holding in listedcorporations by individuals and institutions such as pension funds and insurance.These alternative investors include private equity, hedge funds, sovereign wealthfunds, infrastructure funds, etc. These trends have important implications for themanagement and governance of firms that have to date received varied attention. Inparticular, the changing investor landscape raises critical research questionsregarding the structures and processes of shareholder engagement with portfoliocompanies. However, the extent to which alternative investors represent new formsof engagement and governance that cover all stages of firms’ life-cycle is as yetunclear (Wright et al. 2013). The returns from some forms of alternative investors,notably private equity firms, have attracted other forms of entrants to the marketsuch as hedge funds which may have different skills, different objectives anddifferent investment time horizons. Similarly, the entry of sovereign wealth fundsraises further issues and concerns about their strategic objectives and theimplications for their portfolio companies.The increase in the range and diversity of these investment institutions also raisesdirect questions about the extent to which the regulatory authorities are capable ofdealing with the challenges that these new investment vehicles pose in terms of theirinvolvement in corporate governance. Developments in the presence and roles ofalternative investors have generated considerable policy debate and have led to

Considering the recent rapid expansion of shareholder activism phenomenon in the United Kingdom (UK) and the vast amount of resources committed to it by corporations, government and investors, its effectiveness has become a crucial subject for investigation. This article analyzes organizational outcomes of shareholder activism in the UK. This research is based on a unique comprehensive database of shareholder activism events during the period of 1998–2008. We provide a detailed account of different types of activists, activism strategies and shareholder demands associated with the events of activism. Our findings show that the effectiveness of shareholder activism in terms of abnormal stock-market returns varies dramatically depending on its form, type of investor and the nature of investor proposals.

This paper investigates how large family shareholders and institutional block-holders jointly influence informed trading and firm valuation in the Hong Kong stock market. It combines market microstructure research with studies on the governance roles of multiple block-holders and finds that institutional block-holders rely on their relative controlling power vis-à-vis family owners to mitigate problems associated with informed trading. They also use their ownership rights to improve the structure of informed trading. However, these governance roles are predominantly exercised by pressure-resistant institutional block-holders. Informed trading reduces firm valuation, while an improvement in its structure increases valuation. Therefore, the governance roles of controlling families and pressure-resistant institutional block-holders may have different implications in terms of investors? perceptions of private information risk.

Using a data set for the 162 largest Hungarian firms during the period of 1994-1999, this paper explores the determinants of equity shares held by both foreign investors and Hungarian corporations. Evidence is found for a post-privatisation evolution towards more homogeneous equity structures, where dominant categories of Hungarian and foreign owners aim at achieving controlling stakes. In addition, focusing on firm-level characteristics we find that exporting firms attract foreign owners who acquire controlling equity stakes. Similarly, firm-size measurements are positively associated with the presence of foreign investors. However, they are negatively associated with 100% foreign ownership, possibly because the marginal costs of acquiring additional equity are growing with the size of the assets. The results are interpreted within the framework of the existing theory. In particular, following Demsetz and Lehn (1985) and Demsetz and Villalonga (2001) we argue that equity should not be treated as an exogenous variable. As for specific determinants of equity levels, we focus on informational asymmetries and (unobserved) ownership-specific characteristics of foreign investors and Hungarian investors.

Management and employee buy–outs have played a significant role in the privatization of state–owned enterprises. Key research and policy issues are raised concerning whether insider ownership promotes or impedes restructuring and adaptation. This paper reviews and synthesizes studies of the effects of privatization management and employee buy–outs in both developed and transition economies. Trends in privatization buy–outs and conceptual issues concerning the expected effects of privatization buy–outs both in terms of performance and survival are discussed. A review of empirical evidence is presented in terms of the impact of buy–outs on employee attitudes, human resource management, strategy and restructuring, financial and economic performance, together with fresh evidence on survival. Privatization buy–outs can lead to significant restructuring but their impact depends on institutional context and policy. Restructuring may be greater where insiders purchase shares rather than acquiring them virtually free through voucher programmes.

Building links with foreign partners offers major potential for the development of economies in transition. However, in transition economies, old institutions still exert a strong influence on business decisions, posing problems for the development of these links. This paper analyzes the presence of foreign partners in the firms of transition economies, and focuses on the influences on foreign partner presence. We emphasize the need for international executives and researchers to understand the heterogeneity of different countries within apparently similar regions. Surveys using longitudinal, multi-industry data from 152 newly privatized firms in Russia, Ukraine and Belarus show that the presence of a foreign partner is positively associated with management’s desire for access to foreign markets, and with existing export intensity. If the enterprise is located in Russia, foreign partner presence is also positively associated with replacement of the chief executive, and with the amount of investment required. The presence of a foreign partner is found to be negatively associated with directors giving priority to strategies to develop domestic markets, with an enterprise already having greater than average foreign ownership and positively with the company being perceived to be attractive to a potential foreign partner because it provides access to local technology. There is also a worrying reduction in the presence of foreign partners over time although enterprise managers appear to becoming more realistic about the attractiveness of their firm to foreign partners.

(Using a sample of 251 IPOs in the United Kingdom, this paper examines interlinks between executive and nonexecutive characteristics, share ownership, and short-term performance measured in terms of share oXer 'underpricing. ' It argues that executives' power and previous experience directly aXect ex ante choice of nonexecutive directors and their ownership interests in thefirm. These endogenously developed governance factors may be used by IPO teams strategically to reduce the extent of underpricing. However, there is a selective response of investors to diffierent board characteristics and share ownership structure. Copyright (C) 2002 John Wiley & Sons, Ltd.

In this study, we aim to challenge the traditional assumption that balancing exploration and exploitation results invariably in superior performance. Specifically, we draw on the attention-based vi...

In the last few decades, many new phenomena, such as globalization and digitization, have changed the world by enabling the connection between organizations and individuals across geographies, inst...

Prior research on political strategies has predominantly analyzed singular political activities or drivers for firms to become politically active and, overall, only scarcely obtained insights on performance consequences of political strategizing. To further develop the realm of political strategy, this study analyzes the effects of two “generic” political strategies on firms’ (1) stakeholder network development and (2) performance. Specifically, we provide theoretical and empirical evidence whether the two political strategies add to or substitute each other in their effect on the corresponding outcome variable. We find that an information strategy significantly affects the stakeholder network development, whereas no influence of a financial incentive strategy could be detected. Moreover, we find that the stakeholder network drives firm performance and, more importantly, that the two political strategies substitute each other in their effect on firm performance. Thus, we provide initial insights on the efficiency of political strategies when firms opt to execute an information strategy and financial incentive strategy simultaneously. The results of our study have important implications for research as they put a new light on the efficiency of political strategies.

The fall of the Soviet Union brought new enterprise opportunities whose exploitation required the development of entirely new strategies. Simultaneously, enterprises faced crucial constraints in their governance structures. This paper analyzes the impact of governance structures of privatized firms on one key outcome of new strategies: export intensity. Using a longitudinal, multi-industry dataset of privatized firms in Russia, Ukraine and Belarus, we analyze how export intensity is mediated by strategies involving product development, acquisitions and links with foreign partners.© 2001 JIBS. Journal of International Business Studies (2001) 32, 853–871

This paper provides new survey evidence on effects of concentrated ownership on restructuring and performance in privatized firms in Russia. The major findings are that large-block shareholding is negatively associated with the firm's investment and performance, and this relationship does not depend on the identity of controlling shareholders. These results are consistent with the assumption that when minority shareholders' rights are not adequately protected, the entrenched controlling shareholders may be engaged in extracting ‘control premium’ before pro rata distribution of dividends. The issues raised have relevance to other transitional economies where the privatization process has been followed by an increase in ownership concentration. Copyright © 2001 John Wiley & Sons, Ltd.

Why has growth, especially in exports, in low-income developing and transitional countries been low relative to the rest of the world? Why is it that such countries appear not to be benefiting from globalisation? These are the questions addressed by the studies in this collection, and the answers can underpin new approaches to export promotion. Policies to promote investment - in firms, in labour, in infrastructure - are at least as important as the economic liberalisation that has taken place. Ownership and governance structures of firms underpin their ability to integrate into the global economy. The nature of relationships with buyers and distributors in the more developed markets can determine how they are integrated. There is potential to expand and diversify the exports of marginalised economies, and the research offers pointers to how this can be achieved.

Economic reform in Russia has been described as ‘shock therapy’ because rapid industrial privatization, price liberalization and democratic reforms of the political system were introduced simultaneously. However, shock therapy led to insider control of most manufacturing firms, with important consequences for foreign investment. In contrast, China’s ‘gradualist’ reforms, without privatization or significant democratization, facilitated foreign joint ventures as the dominant means of reforming State-owned enterprises incrementally. This paper proposes an explanation for these contrasting reform paths in Russia and China and then traces their consequences for inward foreign domestic investment (FDI), exporting and for corporate governance in the short and long term. The impact of national level policies on enterprises is demonstrated in a matched pair of cases in Russia and China. Conclusions are drawn for policy, for practice and for future research.

Combinig an agency perspective and downsizing research, in this study we examined two influences on employment-downsizing strategies in privatized firms in Russia, Belarus, and Ukraine: corporate governance and institutional change initiated by business crisis, in turn attributable to industry and country factors. In line with theoretical predictions, the study shows that downsizing is strongly influenced by industry-specific factors, and it is positively associated with outside, noninstitutional shareholding. However, a firm's ability to downsize is negatively associated with the extent of managerial shareholding, a finding consistent with managerial entrenchment.

This paper provides a preliminary examination of the development of corporate entrepreneurship in privatized firms in Russia, Belarus, and Ukraine, three countries with a common background as part of the Soviet Union, but with different incentives and constraints on entrepreneurship since the beginning of transition. Using large-scale surveys of newly privatized companies, the paper shows that there are differences in the nature and extent of entrepreneurship in established businesses in the three countries. The paper utilizes representative samples of general directors in 105 privatized Russian enterprises, 100 privatized Ukranian enterprises, and 68 privatized enterprises in Belarus. Evidence is presented that suggests that Russian privatized firms have lower insider stakes, greater outside ownership, less employee voice, and greater managerial power within the firm than is the case in Belarus and Ukraine. The active monitoring of managers by outsiders may be an important aspect of the transformation of Russian firms to efficient, commercially viable entities. In Ukraine and Belarus a lack of outside involvement in corporate governance may lead to managerial opportunism and low incentives to attract outside strategic investors, including foreign partners. Russia appears to be building a stronger platform for the future development and effectiveness of entrepreneurship than is the case in Ukraine and Belarus. The findings provide evidence of the importance of direct involvement and the development of relationships to counteract the shortcomings of the legal infrastructure and financial reporting mechanisms. In general, the findings of the study for Russia show that in the current hostile and rapidly changing environment, entrepreneurial priorities and actions so far have primarily focused on controlling cash flow, seeking new markets, and redefining businesses through retrenchment and restructuring. Although it is, as yet, too early to examine the longer term effects of the changes in entrepreneurial conditions, the paper presents the first large-scale comparative evidence of the indications of a divergence in entrepreneurial development between the three countries. There was a greater incidence of turnover among the senior management team in Russia. Managers in Ukraine and Belarus had more diverse strategic objectives in contrast to those in Russia where managers have behaved in a more realistic fashion by focusing on retrenchment. For academics, the study's findings suggest further research is needed to examine the longer term nature and effects of corporate entrepreneurship, compare entrepreneurship in new start-ups in the three countries, and compare with corporate entrepreneurship elsewhere in emerging markets and the barriers to the development of corporate entrepreneurship. For practitioners and policy makers, the study highlights the need to develop and enforce an appropriate regulatory framework which strengthens the rules of the game under which corporate entrepreneurship operates.

This paper considers the role of employee ownership and other ownership variables in the corporate governance of privatized companies experiencing acute economic crisis in three republics of the former Soviet Union. After controlling for nonownership influences, their impact is estimated in the context of needed labor and capital retrenchment decisions. The influence of employee (and managerial) ownership seems to be fairly benign, although results show that corporate outside shareholders are associated with more active asset retrenchment strategies in crisis situations. Nongovernance variables, particularly the extent of crisis at an industry level, are shown to provide a more significant and consistent influence.J. Comp. Econom., September 1999, 27(3), pp. 459–474. Centre for Research on Enterprise in Emerging Markets, University of Nottingham Business School, Nottingham NGT 2RD, United Kingdom.

This paper provides new survey evidence on managerial entrenchment and the role of outsiders in the post-privatization restructuring of Russian enterprises. The major findings are that managers are hostile towards outside ownership, and they effectively collude with other employees to preserve insider control. The paper also provides empirical evidence that the gradual accumulation of shares by managers is not based only on a profit motive, but is also driven by their efforts to preserve insider control. The issues raised have relevance to other transition economies where the privatization process has encouraged insider control, such as Ukraine and Belarus.

Privatisation Vouchers in Russia were heavily invested in the holders' own firms. Using data from a recent survey, we show that insider control in firms privatised in 1992-4 through the voucher process (as distinct from the earlier leased buy-out method) is insecure and dependent on managers' support. For employees, investment in insider control appears to have been motivated by employment income insurance rather than expected excess returns on the equity. Managers are predominantly the same individuals as before privatisation and display considerable hostility to outside investors, probably because they fear dismissal should outsiders gain control. Despite insider control, firms are shedding labour quite rapidly through voluntary resignations. Employment dynamics appear to be unrelated to insider equity ownership.

The active monitoring of enterprises is an important aspect of the transformation of Russian firms into efficient, commercially viable entities. This paper uses detailed case study evidence to provide insights into the mechanisms and processes adopted by investment funds, as equity holders; and banks, as debt providers, to monitor the enterprises in which they invest. The findings provide evidence of the importance of direct involvement and the development of relationships to counteract the shortcomings of the legal infrastructure and financial reporting mechanisms.

Executive Overview Managers and directors of privatized Russian enterprises face enormous challenges in revitalizing their businesses to compete in both the domestic and global economies. Managers from more than 300 privatized enterprises in six major industrial regions in Russia were surveyed about the market orientation plans they developed and established to effect the transition and to survive as enterprises. Survivors must then pursue new strategies for revitalization. Foreign investors, similarly, must examine the assets and liabilities of entering the Russian market. Although wholly-owned new ventures and acquisitions have merit under certain circumstances, joint ventures and strategic alliances with Russian partners appear to be the strategy that most fits the current situation for industrial firms.

This paper examines the Hungarian venture capital industry, one of the most well-developed in the emerging economies of Central and Eastern Europe. Using a combination of secondary data, mail questionnaires, and face-to-face Interviews, the paper identifies areas of both similarity and difference with experience in developed capitalist economies. The need for venture capitalists to obtain control is found to be much stronger in Hungary than in the US. The relative importance of DCF and price/earnings ratio methods of valuation are reversed when Hungary and western experience are compared. There was evidence that Hungarian domestic venture capitalists engage in less detailed monitoring than either venture capitalists elsewhere or foreign-based venture capitalists operating in Hungary.

We present a critique of corporate governance research grounded in agency theory and propose that cross-national comparison of corporate governance should consider how the nature and extent of agency relationships differ across different institutional contexts. Building on prior governance studies grounded in sociology and organizational theory we argue that performance outcomes of boards of directors, ownership concentration, and executive incentives may differ depending on the legal system and institutional characteristics in a specific country. Institutions may also affect the extent of complimentarity/substitution among different firm-level governance practices producing patterned variations in firm-level governance mechanisms. Our discussion suggests that researchers need to develop more holistic, institutionally embedded governance framework to analyze organizational outcomes of various governance practices.

Despite increasing research on outward foreign direct investment (OFDI) by firms from emerging economies, our understanding of the relationship between domestic operations and international diversification of these firms is still limited. Using a unique dataset of Chinese listed firms, we examine the impact of domestic diversification on their international diversification. We find that international diversification is positively affected by firms’ domestic industrial and domestic regional diversification. We also find that top management team (TMT)’s previous international experience strengthens the impact of domestic diversification on firms’ international diversification, whereas TMT's prior political connections weakens the impact of domestic diversification on international diversification.

It is increasingly recognized in the management literature that the initial public off ering (IPO) is an important stage in the life cycle of privately held and entrepreneurial fi rms. At this critical juncture, a fi rm has overcome the fi rst challenges of its entrepreneurial phase and entered a growth stage. As Fama and French ( 2004 : 229) emphasize, an IPO “is the point of entry that gives fi rms expanded access to equity capital, allowing them to emerge and grow.” An IPO can provide an entrepreneurial fi rm with critical resources for its future expansion. It can also provide the entrepreneur with the fi rst substantive access to cash from their investment of time and resources in the entrepreneurial eff ort. Despite the growing awareness of the importance of IPOs among both academics and the investor community, the process by which a privately held fi rm transforms itself into a publicly traded company is still not well understood. While numerous studies have investigated the determinants of the going public decision (e.g. Booth and Smith, 1986 ; Jain and Kini, 1999 ) and post-issue performance (e.g. Beatty and Ritter, 1986 ; Brav, Geczy, and Gompers, 2000 ; Espenlaub and Tonks, 1998 ; Michaely and Shaw, 1994 ), there is relatively little research on the related but equally important issue of what factors infl uence the corporate governance mechanism of a fi rm at IPO stage, and how the specifi c characteristics of this mechanism such as board composition, executive incentives, and ownership interests of private equity investors may aff ect the IPO’s performance.

The governments of Hungary, Poland and Russia have used buy-outs as an important privatization strategy which can be viewed as forming a continuum from straightforward sales where management and employees generally achieve significant ownership, as in Hungary, via intermediate approaches as in Poland where both payment and free distribution of shares are involved, to the Russian case where state-owned enterprises were effectively “given away” through a voucher privatization scheme. This paper, first, presents preliminary evidence on the extent and nature of post-privatization restructuring in buy-outs in these three countries, which highlights the transitory nature of this form of organization. Second, in the light of these findings, the paper analyses the possibilities and difficulties associated with enhancing corporate governance and finance.

In a short period of time, the privatization of Russian enterprises has been extensive. The process has been successful in meeting important political objectives to establish an irreversible base of individual share ownership through the rapid transfer of vast numbers of enterprises to the private sector. However, major questions remain with regard to the impact of privatization on efficiency and the successful transition to economically viable enterprises. This article investigates governance and managerial characteristics of 171 Russian buy-out firms both before and after the privatization program that occurred between 1992 and 1994. The program has resulted in significantly lower employment levels, increased training, little investment, but increased equity ownership. These changes may enable managers to effect some additional changes, but more recalcitrant organizations will have to await the development of more robust competition and improved systems of corporate governance.

Corporate governance research based on agency theory has been criticized for being “under-contextualized,” and for evaluating various governance practices independently. To address both criticisms, we take a configurational approach and show how firm-level governance practices interact with informational asymmetries associated with a firm’s industry. By examining foreign Initial Public Offerings (IPOs) that have chosen to list on London stock exchanges, we demonstrate that an assessment of the firm-level corporate governance configurations is incomplete without taking into account the firm’s industry affiliation. Our use of fs/QCA underscores the possibilities configurational approaches have in advancing theories of corporate governance.

This paper examines privatization of state assets, a key element in the process of Russia's economic transformation. In particular, it assesses the spatial impacts of providing each Russian citizen with a voucher that can be used to purchase shares in enterprises undergoing privatization. A focus is on documenting a geographic shift in benefits from voucher-based privatization, initially accruing disproportionally to residents of the Urals and West and East Siberia, and later passing on to urbanized western Russia, where greater levels of investment may be expected in new financial centers such as Moscow, St. Petersburg, and, to a lesser extent, Yekaterinburg. 3 maps, 1 table, 19 references.

* This paper examines the issues which may create pressures and incentives to introduce efficiency-enhancing governance structures in enterprises which are privatized through voucher schemes in Russia. These pressures emphasize the need to view buy-outs created on privatization as transitory organizational forms with a three-stage process being suggested as the most feasible for developing governance mechanisms which produce efficiency gains, The paper uses illustrative case studies of the first major enterprises to experience post-privatization ownership changes.