Some Corporate Governance specifications in economies in transition

Abstract

According to the principles and standards of market economies and based on OECD principles, Corporate Governance should ensure the growth of the value of companies' assets. Besides, it should provide a balanced representation of stakeholders' interests, first of all, to owners, management, and employees. One of the key problems that newly created private enterprises and enterprises created through privatization is their incorporation or the creation of modern corporate governance structures which, as discussed in this paper, are of primary importance for the growth of these companies, for their sustainability, for access to capital and for their investment attractiveness. Achieving these standards in transition economies is proving to be quite problematic, especially in the Eastern and Southeast Europe. Theoretical discussions and empirical research largely conclude that the problems are not so much associated with the legal framework as much as they are concerned with their implementation, especially with the institutional environment and the problems that these countries have with law enforcement and corruption. This paper provides an overview of theoretical discussions on specific corporate governance issues in these countries and then based on the secondary resources and empirical studies in Kosovo's case, a brief comparative analysis of developments in this area in Croatia, Bulgaria, and Kosovo. The conclusions drawn from this analysis appear to be in line with theoretical discussions.