Efficiency and ownership structure -- the case of Poland

We examine the effects of foreign entry on productive e ¢ ciency, during the Polish investment liberalization in the 1990ies. We compare the performance of foreign acquisitions with foreign firms entering the market through greenfield entry, as well as domestic acqui-sitions of privatized firms, domestic greenfields and remaining state-owned (non-privatized) firms. We find that foreign privatized \u85rms have realized larger productivity gains than all types of domestic firms, and that this is not due to higher market power, but rather due to higher investments (a higher capital/labour ratio) and to a more efficient use of the capital and labour. Foreign greenfields have the highest average labor productivity, while Foreign privatizations show the largest productivity increase. The only robust spillover e¤ect between foreign and domestic firms is the one between foreign privatized firms and domestic privatized firms