The transformation into entrepreneurial firms: Examining the context of privatization

This paper builds upon the growing research on both privatization and entrepreneurship and provides a model to predict outcomes of privatization of state-owned enterprises. Previous research has concentrated on the change in ownership as the principal driver of post-privatization increases in firm performance and wealth creation. We suggest that structural conditions of the state-owned enterprise and the privatization process, in combination with characteristics of the new owners, lead to performance changes because they determine the firm’s ability to transform from a state agency to an entrepreneurial organization.