Whitman School of Management at Syracuse University
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Privatization, Corporate Entrepreneurship, and Performance: Testing a Normative Model
Vol. Volume 8, Number 3 December/2003

Bostjan Antoncic and Robert D. Hisrich
Private and institutional investors, management consultants, and national economic policy makers have recognized that privatization is an important vehicle for overcoming the economic and social drawbacks of state owned enterprises management, functioning and performance. Corporate entrepreneurship (entrepreneurial activities and orientations at the level of an established organization) has also been recognized an important element in organizational and economic development, performance and wealth creation. Despite the recognized linkage of privatization and corporate entrepreneurship activities, research has devoted minimal attention to explicitly investigating relationships among privatization, corporate entrepreneurship and performance elements. This study contributes to a better understanding of privatization driven corporate entrepreneurship and performance by developing and testing a normative model on a sample of Slovenian firms. The findings of this study demonstrate that the privatization method (private control versus extended state control) makes a difference in organizational growth and profitability, particularly in terms of its strong direct effects, as well as with mediation of corporate entrepreneurship activities that include new venture formation, product/service innovation, and process innovation. In addition, privatization time (speed of finalization of formal privatization procedures) tends to be a strong predictor of subsequent organizational profitability.

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