Post-privatisation Governance and Corporate Entrepreneurship in Transition Economies

Abstract

Although the former communist countries that have been transitioning to market-oriented reforms share various common features (Peng 2000, World Bank 2002), they follow different paths and pursue the transition at different speeds. While countries in Central and Eastern Europe (CEE) and the Commonwealth of Independent States (CIS) have employed a "big bang" approach and democratic political reforms in their transformation toward a market economy (Nolan and Ash 1995, Buck, Filatotchev et al. 1998, Filatotchev, Buck et al. 2000), East Asian countries (including China and Vietnam) have adopted a longer-term evolutionary process. Accordingly, countries in the CEE/CIS region have experienced rapid mass privatisation, while China and Vietnam have pursued a gradual partial-privatisation policy. Given the significant benefits of entrepreneurial activities for economic growth and countries' competitive advantages, an understanding of how corporate governance enables entrepreneurial activities is crucial. This paper aims to provide a more systematic comparative understanding of corporate governance in the two groups of transition economies by looking into the relationship between board characteristics and corporate entrepreneurship in the context of gradual privatisation economies. To do so, it adopts a multi-theoretical approach to analyse the influence of board governance on corporate entrepreneurship in transition economies.

Keywords: corporate entrepreneurship, board governance, transition economy