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How Efficient are Firms in Transition Countries? Firm-Level Evidence from Bulgaria and Romania

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Author Info
Konings, Jozef
Repkin, Alexander

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Abstract

Stochastic frontier production functions are estimated for Bulgarian (1993–5) and Romanian (1994–5) manufacturing industries using firm-level panel data. The technical efficiency of firms is found to vary significantly both within and across industrial sectors in each country. We find strong evidence of a positive relationship between firm technical efficiency levels and their profitability, which suggests the reforms have succeeded in creating hard budget constraints. The relationship between firm efficiency and size is also found to be positive, suggesting big industrial firms in the former planned economies are not necessarily inefficient.

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Paper provided by C.E.P.R. Discussion Papers in its series CEPR Discussion Papers with number 1839.

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Date of creation: Mar 1998
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Handle: RePEc:cpr:ceprdp:1839

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Related research
Keywords: Efficiency; Firm Size; stochastic production frontier;

Find related papers by JEL classification:
C23 - Mathematical and Quantitative Methods - - Single Equation Models; Single Variables - - - Models with Panel Data
C52 - Mathematical and Quantitative Methods - - Econometric Modeling - - - Model Evaluation and Testing
D24 - Microeconomics - - Production and Organizations - - - Production; Capital and Total Factor Productivity; Capacity
L0 - Industrial Organization - - General

Cited by:
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  1. Michael Funke & Jörg Rahn, 2000. "How Efficient is the East German Economy? An Exploration With Micro Data," Quantitative Macroeconomics Working Papers 20012, Hamburg University, Department of Economics. [Downloadable!]
    Other versions:
  2. Jan De Loecker, 2002. "Are EU Candidate Countries Ready for the Single Market? Comparing Performance with an EU Benchmark," LICOS Discussion Papers 12302, LICOS - Centre for Institutions and Economic Performance, K.U.Leuven. [Downloadable!]
  3. Gabor Korosi & Laszlo Halpern, 2000. "Efficiency and Market Share in Hungarian Corporate Sector," IEHAS Discussion Papers 0009, Institute of Economics, Hungarian Academy of Sciences. [Downloadable!]
    Other versions:
  4. John S. Earle & Almos Telegdy, 2002. "Privatization Methods and Productivity Effects in Romanian Industrial Enterprises," Staff Working Papers 02-81, W.E. Upjohn Institute for Employment Research. [Downloadable!] (restricted)
    Other versions:
  5. Jozef Konings & Patrick Paul Walsh, 1998. "Disorganisation in the Transition Process: Firm Level Evidence from Ukraine," LICOS Discussion Papers 7198, LICOS - Centre for Institutions and Economic Performance, K.U.Leuven. [Downloadable!]
    Other versions:
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