Decline of Corporate Enterprises in Transitional Agriculture: Evidence from Lithuania DIRK J BEZEMER 1 , DONATAS STANIKUNAS 2 & ROMUALDAS ZEMECKIS 2 1 Department of Economics, University of Groningen, The Netherlands. E-mail: d.j.bezemer@rug.nl 2 Lithuania Institute of Agrarian Economics, V.Kudirkos 18, LT-2600, Vilnius, Lithuania In most transition economies, agricultural reforms have led to the emergence of family farms and household food production and to the decline of corporate farms. This study explores that trend for the case of Lithuania based on secondary information and primary survey data. The structure of corporate farms and links to the economic environment are explored. Specific hypotheses on the reasons for the profitability crisis in corporate farms are developed and tested. The paper concludes with a critical discussion of current changes in farm structures in the transition economies. Comparative Economic Studies (2006) 48, 156–182. doi:10.1057/palgrave.ces.8100146 Keywords: transition, agriculture, enterprise restructuring, survey data, ordered probit model JEL Classifications: P46, Q12, R20, O12, O18 INTRODUCTION An important aspect of the economic transition in the formerly socialist economies is the change in the structure of enterprises within agricultural sectors. Following the agricultural reforms, such as privatisation of farm land and assets, in the early 1990s, traditional socialist farm structures (collective and state farms) have generally been transformed into corporate farms: capitalist enterprises with the legal labels of partnerships, joint-stock companies or limited liability companies. Simultaneously, in all of the transition economies millions of private individual farms – family farms – Comparative Economic Studies, 2006, 48, (156–182) r 2006 ACES. All rights reserved. 0888-7233/06 $30.00 www.palgrave-journals.com/ces