Effects of Privatization of Industrial Enterprises in Bulgaria. Report on Empirical Research

Abstract

In accordance with international standards, a former state-owned enterprise is regarded as a privatized enterprise if the stake owned by the state does not exceed the value of one third of its assets. The criterion concerning the moment of privatization – by the end of 1996 – is justified by the fact that the time period between privatization and the moment of carrying out the research is, practically, not shorter than two years. On the one hand, this period is usually too short to conclusively determine the impact of privatization on the situation of the surveyed enterprises. This situation in the early post-privatization period is to a major extent conditioned by the enterprise's standing before privatization. Other factors which must be taken into account here are the charges involved with the purchase of the privatized entity and, as the results of the research indicate, additional commitments assumed by investors. On the other hand, the at least two-year period since the completion of the privatization scheme provides a reliable basis for identification of the at least fundamental trends and tendencies in the post-privatization situation of the surveyed enterprises.