Mark Klinedinst

The Japanese Cooperative Sector

The modern history of Japanese cooperatives began in the Meiji Era of the nineteenth century. Today in Japan, more than 30 million people are members in cooperatives.1 The cooperative sector is especially strong in agriculture and related industries, and cooperatives are also found in the retail distribution of food, medical care, insurance, housing, universities, and in the financial industry as investors and with credit unions. While the range of industries where cooperatives are found is similar in some ways to that of the United States and other industrialized countries, the extensive penetration of one sector-agriculture-is neither paralleled in the United States nor in other industrialized countries. The strength of involvement in one sector of the economy in Japan is both a strength, and in light of recent trade pressure to lift agricultural tariffs, a potentially dangerous strategy.

Structural adjustment policies and productive efficiency of socialist enterprises

Abstract The paper uses panel data from a five percent stratified random sample of Yugoslav industrial enterprises to test several hypotheses about the determinants of productive efficiency. The estimating procedure selects the production function best supported by the data and allows for industry-specific production function parameters as well as from firm-specific fixed or random effects. The instrumental variable estimates suggest that productive efficiency is unaffected by the four structural/policy variables whose effect we examine: the extent of export orientation, joint venture status, divisionalization of the firm, and the firms market share.

Bank Decapitalization and Credit Union Capitalization

This article looks at the theory and empirical findings of excessive compensation on the recent financial implosion across institutional forms in banking. Compensation levels have gone up dramatically over the last 30 years as deregulation and concentration have grown. Some banks and quite a few credit unions avoided closure by prudent portfolio selection and keeping reserves up by maintaining compensation levels closer to the median level. Empirical findings here are based on a unique panel data set on U.S. commercial banks, thrifts, and credit unions from 1994 through 2010 (more than 300,000 observations) that provide evidence that the firms with the highest net worth typically are smaller institutions, are credit unions, have smaller insider loans as a percentage of assets, and have lower average pay levels. The favorable results here for credit unions, financial cooperatives, should help guide policy when deciding which type of financial institutions should be encouraged.

Insider Ownership and Firm Performance: Evidence from Bulgaria

By using panel data for a sample of Bulgarian manufacturing firms we investigate the impact of the privatization process. All sample firms started under state control and many were privatized during the study period. Our rich data enable us to use and estimate a number of specifications to rigorously analyze the impact of privatization, and in particular insider privatization. Contrary to mainstream theory (e.g., Boycko, 1996) and the findings of an influential empirical survey (Djankov & Murrell, 2002), our results show no difference on firm performance for insider versus other methods of privatization. As such our findings more nearly support those of other studies for Bulgaria (e.g., Miller & Lazorov, 2011; Jones, Rock, & Klinedinst, 1998) and selected studies for other transition countries (e.g., Jones & Mygind, 1999 for Estonia).

Corporate Governance and Executive Compensation in Bulgaria after Mass Privatization: Evidence from New Panel Data

By using new panel data for a sample of Bulgarian firms that comprises both state owned and privatized firms (including new private firms), evidence is presented on the potential impact of ownership and age of the firm on diverse issues concerning corporate governance and executive compensation during 1997-2001. Privatization status and whether firms are de novo or not is found to be associated with differences in many areas including: the size and composition of company boards; the size of CEO pay; internal wage differences; the incidence of performance based compensation; firm objectives; and patterns of decision-making influence. To investigate the determinants of executive compensation we first estimate standard CEO specifications. These baseline regressions reveal that CEO pay is: (i) positively related to size (ii) positively related to performance; (iii) significantly affected by ownership; (iv) influenced by whether a firm is de novo or not. These findings and the fact that both size and performance elasticities are much larger than those estimated before the start of mass privatization provide more general support than previously for the view that privatization has imposed strong discipline on the level of CEO compensation. In a series of additional regressions we proceed beyond standard specifications and examine the impact on CEO pay on other aspects of corporate governance. We find CEO pay is associated with: decision making influence; whether the contract provides for performance based compensation; whether the firm belongs to an employer’s federation; the extent of employee and managerial ownership. However some dimensions of corporate governance are not systematically associated with CEO pay. Chief amongst these is board structure. Many of these findings provide support for the view that managerial influence (rather than agency relationships) plays a key role in corporate governance in Bulgarian firms.