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The Effect of Ownership and Competitive Pressure on Firm Performance in Transition Countries. Micro Evidence from Bulgaria, Romania and Poland

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Author Info
Saul Estrin
Jozef Konings
Zbigniew Zolkiewski
Manuela Angelucci

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Abstract

This paper uses a unique representative firm level data set to analyse the effect of domestic and international competitive pressure and ownership changes in three emerging economies, Bulgaria Poland and Romania. Our main findings can be summarized as follows: Domestic competitive pressure, measured by market structure, and increased import penetration are associated with higher firm performance in Poland irrespective of the ownership structure of firms. Furthermore the positive effects of increased import competition are reinforced for foreign owned firms. In contrast, in Bulgaria and Romania, increased import penetration is associated with lower firm performance, while there is some evidence that more competitive market structures is associated with higher total factor productivity. However, these effects depend on the ownership structure of firms, which suggests the existence of complementarities between competitive pressure and ownership changes. The results also indicate that privatisation has positive effects on firm performance. In particular, domestic private firms and foreign owned firms outperform state owned firms. Furthermore, there is evidence that foreign owned firms do better than domestically owned private firms especially in Bulgaria and Poland. The results on ownership are somewhat weaker for Romania.

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Publisher Info
Paper provided by LICOS - Centre for Institutions and Economic Performance, K.U.Leuven in its series LICOS Discussion Papers with number 10401.

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Length: 30 pages
Date of creation: 2001
Date of revision:
Handle: RePEc:lic:licosd:10401

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Related research
Keywords: competitive pressure; privatisation; firm performance;

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Find related papers by JEL classification:
D24 - Microeconomics - - Production and Organizations - - - Production; Capital and Total Factor Productivity; Capacity
D40 - Microeconomics - - Market Structure and Pricing - - - General
D42 - Microeconomics - - Market Structure and Pricing - - - Monopoly
J42 - Labor and Demographic Economics - - Particular Labor Markets - - - Monopsony; Segmented Labor Markets
L10 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance - - - General
L33 - Industrial Organization - - Nonprofit Organizations and Public Enterprise - - - Boundaries of Public and Private Enterprise; Privatization; Contracting Out
P23 - Economic Systems - - Socialist Systems and Transition Economies - - - Factor and Product Markets; Industry Studies; Population
P31 - Economic Systems - - Socialist Institutions and Their Transitions - - - Socialist Enterprises and Their Transitions

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Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
  1. Konings, Jozef, 1997. "Competition and Firm Performance in Transition Economies: Evidence from Firm Level Surveys in Slovenia, Hungary and Romania," CEPR Discussion Papers 1770, C.E.P.R. Discussion Papers. [Downloadable!] (restricted)
  2. Dewatripont, M & Roland, G, 1992. "Economic Reform and Dynamic Political Constraints," Review of Economic Studies, Blackwell Publishing, vol. 59(4), pages 703-30, October. [Downloadable!] (restricted)
  3. Saul Estrin, 2001. "Competition and Corporate Governance in Transition," William Davidson Institute Working Papers Series 431, William Davidson Institute at the University of Michigan Stephen M. Ross Business School. [Downloadable!]
  4. Djankov, Simeon & Hoekman, Bernard, 1998. "Avenues of Technology Transfer: Foreign Investment and Productivity Change in the Czech Republic," CEPR Discussion Papers 1883, C.E.P.R. Discussion Papers. [Downloadable!] (restricted)
  5. Grosfeld, Irena & Tressel, Thierry, 2001. "Competition, Corporate Governance: Substitutes or Complements? Evidence from the Warsaw Stock Exchange," CEPR Discussion Papers 2888, C.E.P.R. Discussion Papers. [Downloadable!] (restricted)
  6. J. David Brown & John S. Earle, 2000. "Competition and Firm Performance: Lessons from Russia," William Davidson Institute Working Papers Series 296, William Davidson Institute at the University of Michigan Stephen M. Ross Business School. [Downloadable!]
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  7. Brown, J David & Earle, John S, 2001. "Privatization, Competition and Reform Strategies: Theory and Evidence from Russian Enterprise Panel Data," CEPR Discussion Papers 2758, C.E.P.R. Discussion Papers. [Downloadable!] (restricted)
  8. Lubomir Lizal & Jan Svejnar, 2001. "Investment, Credit Rationing and the Soft Budget Constraint: Evidence from Czech Panel Data," William Davidson Institute Working Papers Series 363, William Davidson Institute at the University of Michigan Stephen M. Ross Business School. [Downloadable!]
    Other versions:
  9. Irena Grosfeld & Thierry Tressel, 2001. "Competition and Corporate Governance : Substitutes or Complements ? Evidence from the Warsaw Stock Exchange," DELTA Working Papers 2001-06, DELTA (Ecole normale supérieure). [Downloadable!]
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  10. Nickell, Stephen & Nicolitsas, Daphne & Dryden, Neil, 1997. "What makes firms perform well?," European Economic Review, Elsevier, vol. 41(3-5), pages 783-796, April. [Downloadable!] (restricted)
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  11. Wendy Carlin & Steven Fries & Mark Schaffer & Paul Seabright, 2001. "Competition and Enterprise Performance in Transition Economies: Evidence from a Cross-country Survey," William Davidson Institute Working Papers Series 376, William Davidson Institute at the University of Michigan Stephen M. Ross Business School. [Downloadable!]
    Other versions:
  12. Aghion, Philippe & Dewatripont, Mathias & Rey, Patrick, 1999. "Competition, Financial Discipline and Growth," Review of Economic Studies, Blackwell Publishing, vol. 66(4), pages 825-52, October. [Downloadable!] (restricted)
    Other versions:
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Cited by:
(explanations, Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.)

  1. Mathilde Maurel, 2001. "Investment, Efficiency, and Credit Rationing: Evidence from Hungarian Panel Data," William Davidson Institute Working Papers Series 403, William Davidson Institute at the University of Michigan Stephen M. Ross Business School. [Downloadable!]
  2. Jan Svejnar & Evzen Kocenda, 2002. "The Effects of Ownership Forms and Concentration on Firm Performance after Large-Scale Privatization," William Davidson Institute Working Papers Series 471, William Davidson Institute at the University of Michigan Stephen M. Ross Business School. [Downloadable!]
  3. Jan Hanousek & Evžen Ko?enda & Jan Svejnar, 2004. "Ownership, Control and Corporate Performance After Large-Scale Privatization," William Davidson Institute Working Papers Series 2004-652, William Davidson Institute at the University of Michigan Stephen M. Ross Business School. [Downloadable!]
    Other versions:
  4. Pradeep Mitra & Alexander Muravyev & Mark E. Schaffer, 2008. "Convergence in institutions and market outcomes: Cross-country and time-series evidence from the BEEPS surveys in transition economies," CERT Discussion Papers 0809, Centre for Economic Reform and Transformation, Heriot Watt University. [Downloadable!]
    Other versions:
  5. Patricia Augier & Michael Gasiorek & Gonzalo Varela, 2007. "Determinants of Productivity in Morocco - The Role of Trade?," CARIS Working Papers 02, Centre for the Analysis of Regional Integration at Sussex, University of Sussex. [Downloadable!]
  6. Jan Svejnar & Evzen Kocenda, 2003. "Ownership and Firm Performance after Large-Scale Privatization," William Davidson Institute Working Papers Series 471a, William Davidson Institute at the University of Michigan Stephen M. Ross Business School. [Downloadable!]
    Other versions:
  7. Ahmadu Sanda & Aminu S. Mikailu & Tukur Garba, 2005. "Corporate governance mechanisms and firm financial performance in Nigeria," Research Papers RP_149, African Economic Research Consortium. [Downloadable!]
  8. Angelucci, Manuella & Bevan, Alan & Estrin, Saul & Fennema, Julian A & Kuznetsov, Boris & Mangiarotti, Giovanni & Schaffer, Mark E, 2002. "The Determinants of Privatized Enterprise Performance in Russia," CEPR Discussion Papers 3193, C.E.P.R. Discussion Papers. [Downloadable!] (restricted)
    Other versions:
  9. Andrei Medvedev & Alena Zemplinerová, 2005. "Does Competition Improve Performance? Evidence From The Czech Manufacturing Industries," Prague Economic Papers, University of Economics, Prague, vol. 2005(4), pages 317-330. [Downloadable!] (restricted)
  10. S. Dobbelaere, 2003. "Ownership, Firm Size and Rent Sharing in a Transition Country," Working Papers of Faculty of Economics and Business Administration, Ghent University, Belgium 03/170, Ghent University, Faculty of Economics and Business Administration. [Downloadable!]
  11. Çaðla Ökten, 2005. "The Effects of Privatization on Efficiency : How Does Privatization Work?," Departmental Working Papers 0504, Bilkent University, Department of Economics. [Downloadable!]
  12. Ralitza Dimova, 2003. "The Impact of Structural Reforms on Employment Growth and Labour Productivity: Evidence from Bulgaria and Romania," LICOS Discussion Papers 13203, LICOS - Centre for Institutions and Economic Performance, K.U.Leuven. [Downloadable!]
    Other versions:
  13. Peri, Giovanni & Urban, Dieter, 2002. "The Veblen-Gerschenkron Effect of FDI in Mezzogiorno and East Germany," Working Papers 03-1, University of California at Davis, Department of Economics. [Downloadable!]
    Other versions:
  14. Panagiotis Staikouras, 2004. "Structural Reform Policy: Privatisation and Beyond—The Case of Greece," European Journal of Law and Economics, Springer, vol. 17(3), pages 373-398, May. [Downloadable!] (restricted)
  15. Stefan Lutz & Oleksandr Talavera, 2004. "Do Ukrainian Firms Benefit from FDI?," Economic Change and Restructuring, Springer, vol. 37(2), pages 77-98, 06. [Downloadable!] (restricted)
    Other versions:
  16. Sabien Dobbelaere, 2001. "Insider Power and Wage Determination in Bulgaria An Econometric Investigation," LICOS Discussion Papers 11101, LICOS - Centre for Institutions and Economic Performance, K.U.Leuven. [Downloadable!]
  17. Robert M. Feinberg & Mieke Meurs, 2005. "Market Reform, Infrastructure and Exchange Rate Passthrough in Central and Eastern Europe," Post-Communist Economies, Taylor and Francis Journals, vol. 17(1), pages 21-32, March. [Downloadable!] (restricted)
  18. Hagemejer, Jan, 2007. "Factors driving the firms decision to export. Firm-level evidence from Poland," MPRA Paper 17717, University Library of Munich, Germany. [Downloadable!]
  19. Juan Zalduendo, 2003. "Enterprise Restructuring and Transition: Evidence from the Former Yugoslav Republic of Macedonia," IMF Working Papers 03/136, International Monetary Fund. [Downloadable!]
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