World Bank2012-06-122012-06-122008-06-10https://hdl.handle.net/10986/7808The private enterprise sector in Bosnia and Herzegovina (BiH) has been expanding steadily, and estimates are that it presently contributes close to 50 percent of Gross Domestic Product (GDP). The BiH private enterprise sector initially developed following the privatization program starting in 1999. Under that program, the majority of state owned enterprises (SOEs) that were privatized were done so using the voucher privatization process. Under this procedure, vouchers were issued to all citizens over 18 years of age, these vouchers could be used to buy state owned properties or shares in SOEs. To promote an orderly process, privatization investment funds were created to help purchase such vouchers in exchange for citizens' shareholdings in the investment funds themselves. This process was also meant to develop the capital markets via the eventual trading of such shares. However, the process of voucher-to-share conversion, resulted in the new owners seldom having to invest their own capital in these voucher privatized enterprises. This was because the 'ownership transfer' was provided on a grant basis from the government to citizens. Because of this, new ownership became automatic, without incentives to put up additional capital to improve the businesses, leaving these enterprises performing below potential capacity. The government should consider implementing a pilot program of restructurings to attract new investor capital within a well organized framework using a methodology defined in advance. Finally, economic research shows that increased firm competitiveness, innovation, technological capability, and export potential have a strong correlation with foreign ownership.en-USCC BY 3.0 IGOACCESS TO INFORMATIONACCOUNTINGACCOUNTS RECEIVABLEARREARSASSET BASEASSETS RATIOAUDITSBANK ACCOUNTBANKING SECTORBANKRUPTCIESBANKRUPTCYBANKRUPTCY COURTSBANKRUPTCY PROCEDURESBARRIERBARRIER TO ENTRYBARRIERS TO INVESTMENTBENEFICIARIESBOOK MARKETBOOK VALUEBRANCH OFFICESBUSINESS ENVIRONMENTBUSINESS OPERATIONSBUSINESS PERFORMANCEBUSINESS REGULATIONSBUSINESS RISKCADASTRECADASTRESCAPITAL BASECAPITAL GAINSCAPITAL MARKETSCAPITAL NEEDSCASH FLOWCLIENT COUNTRIESCOMMERCIAL BANKCONTRACT ENFORCEMENTCORPORATE GOVERNANCECORPORATE TAXCORPORATE TAX RATESCREDIT EXPANSIONCREDIT RISKCREDITORCREDITOR CLAIMSCREDITORSCURRENCYCURRENT ACCOUNT BALANCECURRENT ACCOUNT DEFICITDEBT LEVELSDEBT OBLIGATIONSDEBT RELIEFDEBTSDEEDSDEFAULTERSDEVELOPING ECONOMIESDEVELOPMENT BANKDISBURSEMENTSDISPUTE RESOLUTIONDIVIDENDSDOMESTIC DEBTDOMESTIC INVESTORSDUE DILIGENCEECONOMIC DEVELOPMENTECONOMIC REFORMSELECTRONIC SIGNATURESEMERGING MARKETSENABLING ENVIRONMENTENTERPRISE CREDITENTERPRISE PERFORMANCEENTERPRISE SECTOREQUIPMENTEQUITY FUNDEQUITY FUNDSEQUITY SWAPSEXCHANGE RATEEXISTING INFRASTRUCTUREEXPENDITURESEXTERNAL COMPETITIVENESSEXTERNAL DEBTEXTERNAL INVESTOREXTERNAL INVESTORSEXTERNAL TRADEFINANCIAL DISTRESSFINANCIAL INFORMATIONFINANCIAL MARKETSFINANCIAL SECTORFINANCIAL SECTOR DEVELOPMENTFINANCIAL SERVICESFINANCIAL STATEMENTFINANCIAL STATEMENTSFIXED ASSETSFOREIGN BANKSFOREIGN DIRECT INVESTMENTFOREIGN DIRECT INVESTMENTSFOREIGN INVESTORSFOREIGN MARKETFOREIGN OWNERSHIPFORGIVENESSFREE TRADEFUTURE PROSPECTSGOVERNMENT DEBTGOVERNMENT INVOLVEMENTGOVERNMENT REVENUEGOVERNMENT SUPPORTGROSS DOMESTIC PRODUCTHOLDINGINCOMEINCOME TAXINDEBTEDNESSINFLATIONINFORMAL ECONOMYINSTITUTIONAL CAPACITIESINSURANCEINTERNATIONAL RESERVESINVENTORYINVESTMENT CLIMATEINVESTMENT FUNDINVESTMENT FUNDSINVESTMENT OPPORTUNITIESINVESTMENT RATESINVESTOR DEMANDINVESTOR INCENTIVESINVESTOR INTERESTINVESTOR PARTICIPATIONISSUANCEJURISDICTIONSLABOR MARKETLABOR MARKETSLAND OWNERSHIPLEGAL FRAMEWORKLEGAL FRAMEWORKSLEVIESLIQUIDATIONLIQUIDATIONSLIQUIDITYLIQUIDITY RISKLOANLOCAL BANKSLOCAL CAPITAL MARKETSLOCAL GOVERNMENTSMACROECONOMIC STABILITYMARKET CONDITIONSMARKET MECHANISMSMARKET SHAREMARKET VALUATIONSMARKET VALUEMARKET VALUESMONETARY POLICIESMUTUAL FUNDNONPERFORMING LOANSOPERATIONAL EFFICIENCIESOUTSIDE INVESTORSPENSIONPENSION CONTRIBUTIONSPENSION SYSTEMPENSIONSPOLITICAL ECONOMYPORTFOLIOPORTFOLIO MANAGERSPOTENTIAL INVESTORSPRIVATE INVESTMENTPRIVATE INVESTORPRIVATE INVESTORSPRIVATE SECTORPRIVATE SECTOR DEVELOPMENTPRIVATE SECTOR GROWTHPRIVATIZATION INVESTMENTPRIVATIZATIONSPUBLIC PENSIONPUBLIC POLICYPUBLIC REGISTRYRAPID GROWTHREAL PROPERTYRED TAPEREFORM PROGRAMREGISTRATION FEEREGISTRATION LAWSREGISTRATION PROCESSREGISTRATION SYSTEMREGISTRY OFFICEREGULATORY BARRIERSREGULATORY ENVIRONMENTREGULATORY FRAMEWORKREGULATORY INFRASTRUCTUREREGULATORY REGIMEREGULATORY SYSTEMRESERVERESERVESRETURNRETURN ON ASSETSSAVINGSSECURITIESSECURITIES LAWSSHAREHOLDERSHAREHOLDERSSMALL ENTERPRISESSOLVENCYSTAMP DUTYSTATE ENTERPRISESSTOCK EXCHANGESTOCK EXCHANGESSTOCK MARKETSTOCKSSUSTAINABLE DEVELOPMENTSUSTAINABLE GROWTHTAXTAX DEBTTAX DEBTSTAX POLICYTAX RATETAX RATESTRACK RECORDTRADE BALANCETRADE REGIMETRADE SECTORTRADINGTRADING VALUETRANSITION ECONOMIESTRANSPARENCYTRUSTEESTURNOVERUNEMPLOYMENT RATEUNEMPLOYMENT RATESUNSECURED CREDITORSVALUATIONSVOLATILITYVOUCHER PRIVATIZATIONWAGE GROWTHWAREHOUSEWORKING CAPITALWorld Bank10.1596/7808