Corporate governance and employee ownership in an economic crisis: Enterprise strategies in the former USSR

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. (C) 1999 Academic Press.