Browsing Research documents by Author "Mygind, Niels"
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Evidence from EstoniaJones, Derek C; Kalmi, Panu; Mygind, Niels (København, 2003)[More information][Less information]
Abstract: In this paper we use rich panel data for a representative sample of Estonian enterprises to analyse diverse issues related to the determinants of ownership structures and ownership changes after privatisation. A key focus is to determine whether ownership changes are related to economic efficiency. While employee owned firms are found to be much more prone than other firms to switch ownership categories, often "employee owned" firms remain "insider-owned" as ownership passes from current employees to managers and former employees. Logit analyses of the determinants of ownership structures and ownership changes provides mixed support for several hypotheses. As predicted: (i) wealth and resource constraints play a crucial role in the determination of ownership, with foreigners buying firms with the highest equity levels and insiders buying firms with the lowest equity valuations; (ii) risk aversion explains subsequent ownership changes, especially away from employee ownership; (iii) allocation of ownership depends on the pre-privatisation origin and location of the firm, and these factors also influence subsequent ownership changes. Finally we compare our findings with those achieved by using more conventional approaches to analyze efficiency that use very similar data. Reassuringly the evidence presented in this paper is consistent with the view that efficiency considerations drive ownership changes (while earlier analysis for Estonia and for many other transition economies has identified the impact of ownership on economic performance.) However, the findings in this paper also establish that there are important influences besides economic efficiency that affect enterprise ownership and ownership changes. URI: http://hdl.handle.net/10398/6610 Files in this item: 1
wp560.pdf (577.5Kb) -
Theory and Evidence from the BalticsJones, Derek C.; Mygind, Niels (København, 2004)[More information][Less information]
Abstract: We begin by identifying a typical governance life-cycle, defined as changes in ownership structure, and including both the identity of the major owner and ownership concentration. The cycle is marked by key events and phases including start-up, initial growth, mature growth, and possibly a crisis and restructuring stage or exit stage. The governance cycle for transitional countries reflects some specific characteristics –e.g. often privatization produces specific initial ownership structures, with an unusually high proportion of insider, especially, employee ownership. Subsequently pres-sures for restructuring produce strong impulses for ownership changes. There is limited possibility for external finance because of the embryonic development of the banking system and the capital markets during early transition. The governance cycle is also influenced by specific features of the institutional, cultural and economic environment in a country. The varying importance of these fac-tors is expected to produce differences in key features of ownership cycles such as the speed at which particular ownership changes occur. To provide simple hypothesis tests, we use new and rich enterprise panel data sets for the three Bal-tic countries. The data enable various measures of ownership to be constructed (including the iden-tity of major owners and ownership concentration). The empirical analysis covers the ownership cycle with emphasis on initial ownership and subsequent changes. Our key method is to assemble a series of transition matrices showing both starting and final ownership configurations for sample enterprises and to simultaneously provide information on changes in concentration for the largest single owner. For Estonia this is supplemented with an analysis of the frequencies of different own-ership-cycles including intermediary stages of ownership. In spite of important differences in insti-tutional development, especially concerning the privatization process, we find that governance cy-cles are broadly similar in all countries. Employee ownership is rapidly fading and mainly being succeeded by managerial ownership. There are changes back and forth between manager and do-mestic external ownership, while foreign ownership is quite stable. Ownership concentration is mostly increasing after privatization, which included diversification both to employees and external owners. Since ownership diversification did not sit well with the slow development of the institu-tional framework, as expected we see a subsequent concentration of ownership on both managers, external domestic and foreign owners. However, variation in institutions, there are also important differences across countries. The adjustment of ownership structures is faster in Estonia and this can be explained by the relatively fast pace of institutional change and evolution of important gov-ernance institutions, including tough bankruptcy legislation and advances in the financial system. JEL-codes: G3, J5, P2, P3 Keywords: corporate governance, life-cycle, privatization, ownership change, transition econo-mies, Estonia, Latvia, Lithuania . URI: http://hdl.handle.net/10398/6611 Files in this item: 1
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A comparison of Russia and SloveniaMygind, Niels; Demina, Natalia; Gregoric, Aleksandra; Kapelyushnikov, Rostislav (København, 2004)[More information][Less information]
Abstract: Ownership is determined by firm specific factors and the environment. Firms change over their life-cycle. The governance cycle – here defined as changes in identity of the dominant owner and own-ership concentration - is marked by key phases including start-up, growth, and possibly a restructur-ing or exit stage. During transition the cycle reflects: privatization often with a high proportion of employee ownership like in Russia and in Slovenia; strong pressures for restructuring and owner-ship changes; limited possibility for external finance because of embryonic development of the fi-nancial system. To provide simple hypothesis tests, we use Russian enterprise data for 1995-2003 and Slovenian data covering 1998-2003. In spite of differences in institutional development, con-cerning privatization and development of corporate governance institutions, we find that govern-ance cycles are broadly similar in the two countries. Employee ownership is rapidly fading, but while change to manager and non-financial domestic outsider ownership is typical for Russia, man-ager ownership is not widespread in Slovenia. Instead change to financial outsiders in the form of Privatization Investment Funds is frequent. Foreign ownership, which is rare especially in Russia, is quite stable. The ownership diversification to employees and diversified external owners during privatization did not fit well to the low development of institutions. As expected we observe in both countries a subsequent concentration of ownership on managers, external domestic and foreign owners. JEL-codes: G3, J5, P2, P3 - Keywords: corporate governance, life-cycle, privatization, ownership change, transition economies, Russia and Slovenia. URI: http://hdl.handle.net/10398/7087 Files in this item: 1
slovenia-russia-gov-cycle wp54 2004.pdf (444.0Kb) -
A Dynamic AnalysisHobdari, Bersant; Jones, Derek; Mygind, Niels (København, 2007)[More information][Less information]
Abstract: New and rich panel data for a large and representative sample of firms are used to estimate the sensitivity of access to capital to differing ownership structures. The investment behaviour of firms is examined in a dynamic setting in the presence of adjustment costs, liquidity constraints and imperfect competition. The empirical work is based on the derivation of Euler equations in the presence of symmetric and quadratic adjustment costs and both debt and equity constraints. Whereas the norm is to use ad hoc approaches to model these constraints, our alternative and more consistent leads to the inclusion of financial variables in investment equation in first differences rather than in levels. Our GMM estimates confirm the importance of financial factors in determining investment rates and suggest that firms owned by insiders, especially non-managerial employees, are more prone to be liquidity constrained than are others. Among the other groups, somewhat surprisingly, only domestic outsider owned firms display sensitivity to both measures of the availability of finance, with manager owned firms being sensitive to the availability of external finance, while state owned firms being sensitive to the availability of internal finance. Corporate Investment, Corporate Governance, Adjustment Costs, Liquidity Constraints, GMM Estimates, Transition Economies. URI: http://hdl.handle.net/10398/6585 Files in this item: 1
dynamicinvestmentpaper-2.pdf (381.1Kb) -
Evidence using stochastic frontier approachSinani, Evis; Jones, Derek C.; Mygind, Niels (København, 2007)[More information][Less information]
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Mygind, Niels (København, 2007)[More information][Less information]
Abstract: The Baltic countries have been through a period of 15 years with fast changes in ownership and corporate governance structures. The privatization processes have been quite different in the three countries, but in the dynamics after privatization we see an increasing level of similarity in the adjustment of the ownership structure. We have followed the changes quite closely over the years both in quantitative research and in case studies. We focus on the most important institutions for corporate governance in legislation and enforcement, bankruptcy, company law, minority shareholder protection as well as the development of the banking system and stock exchanges. The paper analyses the main trends in the development and show how all the three Baltic economies are heading toward a typical Continental European system of corporate governance based on quite concentrated blockholder ownership. URI: http://hdl.handle.net/10398/7090 Files in this item: 1
wp64 2007.pdf (215.3Kb) -
Mygind, Niels (København, 1997)[More information][Less information]
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Mygind, Niels (København, 1997)[More information][Less information]
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evidence from the BalticsJones, Derek C.; Mygind, Niels (København, 1999)[More information][Less information]
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Abstract: This paper gives an overview over some theory and empirical evidence on employee ownership and other forms of employee financial participation and answers the following questions: What is employee ownership and what is the relation to other forms of financial participation? Why is employee ownership widespread in some developed market economies like US and in Italy, France and Spain, while it has a quite rare occurrence in the Scandinavian countries? What are the conditions favouring and what are the barriers for employee ownership? What are the advantages and drawbacks for employee owned companies? The paper also gives a summary of the experience in the Baltics – with reference to the following three country articles – and gives finally some perspectives for the future. URI: http://hdl.handle.net/10398/7054 Files in this item: 1
wp66 2007.pdf (104.4Kb) -
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Abstract: The paper investigates the determinants behind the choice between a wage earner position versus employee ownership. These determinants can be found both at the individual level: desire for selfgovernance, risk aversion, human capital, wealth, mobility; company level: size, complexity, heterogeneity of labor, capital intensity, human capital; and society level: labor market dynamics, social security, role of unions and specific institutional rules for employee ownership. The choice is determined by the possibility for wage-earners to adjust working conditions by exit versus the possibilities and costs for employee to use voice as owners of their company. It is predicted that employee ownership will be found in organizations which are small, homogenous, simple in structure, and with high emphasis on specific human capital. The opportunities of globalization with complex organizations crossing borders/cultures will be more difficult to implement in employee owned companies. Specific external institutions (tax incentives, company laws, privatization opportunities) and innovative internal institutions may change the balance in favor of employee ownership. The predictions are not tested, but illustrated by examples especially from recent evidence from Eastern Europe. URI: http://hdl.handle.net/10398/7089 Files in this item: 1
wp65 2007.pdf (97.53Kb) -
Eamets, Raul; Mygind, Niels; Spitsa, Natalia (København, 2006)[More information][Less information]
Abstract: Presently, legal regulation of participation of employees – financial participation as well as participation in decision-making – is not well developed in Estonia. On the one hand, it is due to the fact that no tradition of employee participation could have been formed after Estonia became independent because different, contrary political aims, e.g. development of the free-market economy and promotion of national elites, were given priority. Although employee ownership emerged during the early stage of privatization, it was a temporary phenomenon. Earlier experience with employee participation in decision-making was considered to be a relict from the time under Soviet rule and, therefore, to be discredited and not worth following. On the other hand, the solution of current employment and social problems is not associated with a higher level of participation of employees. URI: http://hdl.handle.net/10398/7112 Files in this item: 1
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Klauberg, Theis; Muravska, Tatyana; Mygind, Niels; Rezepina, Irina (København, 2006)[More information][Less information]
Abstract: This report outlines main trends in employees' financial participation in Latvia including historical, socioeconomic and legal background. A special emphasis is placed on privatization during the transition period which shaped an environment for employees’ financial participation and influenced the current state of employee share ownership and profit-sharing. Attitudes of social partners and the government will be addressed. The report will show why the transition process lead to a low level of employees’ financial participation and the indifference and ignorance of policy makers concerning the development of financial participation. URI: http://hdl.handle.net/10398/7114 Files in this item: 1
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Darškuviené, Valdoné; Hanisch, Stefan; Mygind, Niels (København, 2006)[More information][Less information]
Abstract: Participation of employees in decision-making in Lithuanian companies has its roots in trade union movement as well as in the practice of managing companies under Soviet rule. After Lithuania regained independence, employee ownership was used to facilitate privatization. A notable success was establishment of a number of employee-owned companies that were formerly state-owned enterprises during the first stage of privatization. However, no stronger tradition of employee participation has evolved. Current legal regulation of participation of employees - financial participation, as well as participation in decision-making - is not well developed and does not provide for stronger incentives. The solution of current employment and social problems by the Government, ruling parties as well as social partners is not associated with a higher level of participation of employees. Financial participation is viewed mainly as a way of employee motivation as initiated by managers and current owners of companies. URI: http://hdl.handle.net/10398/7110 Files in this item: 1
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Hobdari, Bersant; Jones, Derek C.; Mygind, Niels (København, 2007)[More information][Less information]
Abstract: Unlike previous empirical work in analyzing investment behavior and the determinants of liquidity constraints, we use a switching regression framework when sample separation is unknown and endogenous and firms are assumed to operate either in the financially constrained or in the financially unconstrained regime. The actual regime the firm is in is determined by a switching or selection function, which depends on those variables that theoretically determine the wedge between internal and external finance, the severity of information and agency problems and time-varying firm characteristics. By using new panel data for Estonian companies during 1993 through 1999 we find that: (i) separate regimes exist in investment behavior; (ii) the likelihood of being financially constrained is higher in firms that are recently privatized, small and where ownership is concentrated in the hands of insiders and the state; (iii) soft budget constraints lower the probability of a firm being financially constrained; (iv) the actual probabilities of operating in the financially constrained regime are calculated to be quite high and essentially stable during 1993-1999: 0.52-0.57 for state owned firms, 0.40-0.46 for domestic owned firms and 0.53-0.57 for employee owned firms; (v) ownership structure affects investment beyond its indirect effects through financial constraints. Corporate Investment, Liquidity Constraints, Insider Ownership, Switching Regression, Soft Budget Constraint. URI: http://hdl.handle.net/10398/6626 Files in this item: 1
switchingregressionpaper-1.pdf (418.7Kb) -
evidence from EstoniaJones, Derek C.; Mygind, Niels (København, 1999)[More information][Less information]
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evidence from EstoniaJones, Derek C.; Mygind, Niels (København, 1999)[More information][Less information]
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evidence from EstoniaJones, Derek C.; Mygind, Niels (København, 1999)[More information][Less information]
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preliminary results from a manager surveyMygind, Niels (København, 2002)[More information][Less information]
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