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Estimates and Determinants of Firm Efficiency in Eastern Europe

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  • Kevin H. McIntyre
  • Christopher A. Martin

Abstract

Romanian enterprise is widely considered to be inefficient relative to that found in other postcommunist nations in Central and Eastern Europe. This paper places the relative (in)efficiency of Romanian firms in context by estimating stochastic frontier production functions using Romanian microdata. We find that, on average, Romanian firms are 10 percent less efficient than firms in Poland, Hungary, and the Czech Republic. Evidence suggests that the measurable industrial drivers of technical efficiency tend to be consistent across countries, suggesting that the relative inefficiency of Romanian enterprise is due to institutional factors.

Suggested Citation

  • Kevin H. McIntyre & Christopher A. Martin, 2013. "Estimates and Determinants of Firm Efficiency in Eastern Europe," Eastern European Economics, Taylor & Francis Journals, vol. 51(2), pages 58-89, March.
  • Handle: RePEc:mes:eaeuec:v:51:y:2013:i:2:p:58-89
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    Cited by:

    1. K. H. McIntyre, 2016. "Enterprise Efficiency in Romania Redux," Romanian Economic Journal, Department of International Business and Economics from the Academy of Economic Studies Bucharest, vol. 19(61), pages 71-94, September.

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