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Disorganisation in the Transition Process: Firm Level Evidence from Ukraine

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Abstract

Most post-communist economies are characterized by an initial collapse in aggregate output. Blanchard and Kremer (1997) and Roland and Verdier (1997) have recently modelled supply side distortions, disorganization in the links of production, that can lead to a short-term output contraction after market liberalisation and a recovery thereafter. This paper is the first to illustrate and test the effects of disorganization in the transition process by using a unique data set of 300 Ukrainian firms. Our results show that for firms that existed under central planning disorganization constrains employment and productivity growth during the transition process to a market economy. In contrast, disorganization plays no role in the determination of employment and productivity growth in newly established private firms.

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Paper provided by LICOS - Centre for Institutions and Economic Performance, KU Leuven in its series LICOS Discussion Papers with number 7198.

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Length: 30 pages
Date of creation: 01 May 1998
Date of revision:
Handle: RePEc:lic:licosd:7198

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Keywords: disorganization; transition process; de novo firms;

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  1. Roland, Gerard, 1994. "On the Speed and Sequencing of Privatisation and Restructuring," Economic Journal, Royal Economic Society, vol. 104(426), pages 1158-68, September.
  2. Steve J. Davis & John Haltiwanger, 1991. "Gross job creation, gross job destruction and employment reallocation," Working Paper Series, Macroeconomic Issues 91-5, Federal Reserve Bank of Chicago.
  3. Stephen Nickell, 1993. "Competition and Corporate Performance," CEP Discussion Papers dp0182, Centre for Economic Performance, LSE.
  4. Aghion, Philippe & Blanchard, Olivier & Burgess, Robin, 1994. "The behaviour of state firms in eastern Europe, pre-privatisation," European Economic Review, Elsevier, vol. 38(6), pages 1327-1349, June.
  5. Boeri, Tito & Cramer, Ulrich, 1992. "Employment growth, incumbents and entrants : Evidence from Germany," International Journal of Industrial Organization, Elsevier, vol. 10(4), pages 545-565, December.
  6. Roland, G. & Verdier, T., 1997. "Transition and the Output Fall," DELTA Working Papers 97-09, DELTA (Ecole normale supérieure).
  7. Portes, Richard, 1994. "Transformation Traps," Economic Journal, Royal Economic Society, vol. 104(426), pages 1178-89, September.
  8. Konings, Jozef, 1997. "Firm growth and ownership in transition countries," Economics Letters, Elsevier, vol. 55(3), pages 413-418, September.
  9. Dewatripont, M & Roland, G, 1992. "Economic Reform and Dynamic Political Constraints," Review of Economic Studies, Wiley Blackwell, vol. 59(4), pages 703-30, October.
  10. Konings, Jozef & Lehmann, Hartmut & Schaffer, Mark E., 1996. "Job creation and job destruction in a transition economy: Ownership, firm size, and gross job flows in Polish manufacturing 1988-1991," Labour Economics, Elsevier, vol. 3(3), pages 299-317, October.
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Cited by:
  1. repec:tcd:wpaper:tep14 is not listed on IDEAS
  2. McGoldrick, Peter & Walsh, P. Paul, 2007. "Successful Factor Market Competition Pre-Privatisation? China`s eclectic.com," Research Technical Papers 3/RT/07, Central Bank of Ireland.
  3. Dalia Marin & Monika Schnitzer, 2000. "Disorganization and Financial Collapse," CESifo Working Paper Series 339, CESifo Group Munich.
  4. Gorodnichenko, Yuriy & Grygorenko, Yegor, 2008. "Are oligarchs productive? Theory and evidence," Journal of Comparative Economics, Elsevier, vol. 36(1), pages 17-42, March.
  5. Patrick Paul Walsh & Peter McGoldrick, 2005. "Estimating Productivity Dynamics During Institutional Change: An Application To Chinese State Owned Enterprises 1980-1994," Trinity Economics Papers tep14, Trinity College Dublin, Department of Economics.
  6. Johan F.M. Swinnen & Anneleen Vandeplas & Miet Maertens, 2009. "Liberalization with Endogenous Institutions: A Comparative Analysis of Agricultural Reform in Africa, Asia, and Europe," LICOS Discussion Papers 23309, LICOS - Centre for Institutions and Economic Performance, KU Leuven.

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