Skip to Main Navigation

Corporate governance in transition economies : the theory and its policy implications (English)

This is the third chapter of the book, "Corporate Governance in Transitional Economies: Insider Control and the Role of Banks" (report no. 14112). The central question addressed is what kind of corporate governance institutions are best suited for the transition economies. This chapter briefly summarizes the present situation in Russia and the four Visegrad countries -the Czech Republic, Hungary, Poland, and Slovakia. While there are important differences in degree and in nature, the basic problem of insider control pervades most of the region. This problem, at the heart of an active recent literature on corporate governance, is discussed in the chapter's third section. The fourth section uses the basic conceptual framework to draw a number of lessons for policymakers. The analysis that strongly suggests that commercial banks will come to play an important role in corporate governance in transition economies is regarded as troubling, given the banking sector's present state. The final section looks at what can be expected from banks in transition economies and discusses what has been and what can be done to improve how they function.


  • Author


  • Document Date


  • Document Type

    Working Paper

  • Report Number


  • Volume No


  • Total Volume(s)


  • Country


    Russian Federation,


    Czech Republic,

    Slovak Republic,

  • Region

    Europe and Central Asia,

  • Disclosure Date


  • Disclosure Status


  • Doc Name

    Corporate governance in transition economies : the theory and its policy implications

  • Keywords

    corporate governance in transition economy;Transition economies;enforcement of property right;financial system;policy point of view;access to external finance;quality of bank portfolio;liquidity of stock markets;commercial bank;insider control;corporate governance arrangement;degree of concentration;investment privatization fund;number of investors;weak legal framework;banks' balance sheet;Capital Adequacy Ratio;holding of debt;pattern of ownership;countries in transition;sources of fund;liquidity of market;real estate price;collection of information;future earnings capacity;corporate governance structure;corporate control model;dissemination of idea;role of bank;corporate governance model;growth in trade;exchange of good;provision of fund;external control system;distribution of wealth;share of control;trade in goods;investment fund;mutual fund;agency problem;banking sector;conceptual framework;financial distress;transitional economy;capital structure;Cash flow;security interest;empirical evidence;trade credit;bond market;bank system;corporate asset;large enterprise;equity monitoring;legal code;loan portfolio;raise funds;bank relationship;asset stripping;debt claim;ownership right;outstanding share;secured debt;corporate finance;bank finance;hold equity;industrialized country;real asset;external fund;liquidity problem;financial claim;internal fund;external source;financial intermediation;payment obligation;incumbent management;banking system;bargaining power;equity holding;asset market;effective monitoring;managerial decision;industrial enterprise;short-term deposit;budget constraint;Banking Regulation;Industrialized countries;downside risk;active intervention;equity market;high ratio;Investment companies;internal finance;Equity Finance;statistical method;financial statistics;ownership transfer;short-term fluctuation;private individuals;business condition;hostile bid;contractual relationship;general shareholder;future revenue;debt finance;capitalist economy;firm capacity;invest capital;trade creditor;option value;banking arrangements;credit relationship;investment opportunities;government guarantee;bank failure;incentive problem;business cycle;high wage;underlying asset;Bank Credit;cash shortage;formal bankruptcy;high share;liquid market;large debt;systemic shocks;dynamic relationship;monitoring mechanism;minority interest;banking activities;financial relationship;debt monitoring;debt holding;control of costs;ownership structure;market liberalization;lending decision;government bailout;mode shift;industrial restructuring;credit crunch;bank lending;Bank Insolvency;high inflation;credit flow;managerial behavior;financing practice;short supply;competition increase;future bailout;market economy;market portfolio;institutional environment;macroeconomic instability;financial regulation;corrupt bureaucrats;early warning;financial market;financial asset;regulatory institution;bond issue;governance problem;payment Settlement;initial distribution;privatization scheme;liability side;resource center;financial contract;institutional analysis;empire building;bank debt;research present;financial arrangement;collected information;risky investment;partner institution;individual investor;scholarly purpose;program account;bankruptcy court;fixed payment;financial difficulties;bank guarantee;program finance;corporate treasury;similar way;efficient decisions;auditing requirements;liquidation value;asset value;recovery credit;firm asset;legal system;comparative analysis;Social Sciences;laboratory experiment;equity claim;macroeconomic situation;multiyear program;general agreement;central planning;institutional framework;capital need;unsecured debt;short-term debt;long-term debt;long-term interest;physical asset;transfer ownership;finance literature;labor shedding;institutional aspect;governance institutions;direct credit;state budget;empirical study;Labor Market;liquid asset;privatization program;shareholder meeting;ample opportunity



Official version of document (may contain signatures, etc)

  • Official PDF
  • TXT*
  • Total Downloads** :
  • Download Stats
  • *The text version is uncorrected OCR text and is included solely to benefit users with slow connectivity.



Corporate governance in transition economies : the theory and its policy implications (English). EDI Working Papers : studies and training design division,no. 94-45 Washington, D.C. : World Bank Group.