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Modeling Institutions, Start-ups and Productivity during Transition

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  • Zuzana Brixiova
  • Balázs Égert

Abstract

The transition paths from plan to market have varied markedly across countries. Central and Eastern European and the Baltic countries, which opted for a fast and profound transformation of their institutions, rapidly narrowed the productivity gap with advanced economies. In contrast, in countries of the Commonwealth of Independent States, which embarked on reforms later and contented with less depth, the productivity gap remains substantial. While the literature has focused mainly on empirical studies, this paper develops a dynamic search model of the firm start-ups that is consistent with the above trends. The model shows that an enabling institutional set up stimulates start-ups of highly productive firms at an earlier stage of transition, underscoring the importance of reforms. The role of the state sector as an employer during transition rises in countries where reforming institutions is particularly costly. Institutions, start-ups et productivité au cours de la période de transition On a pu constater des passages bien différents d’un système planifié vers un système de marché dans l’ex-bloc soviétique. Les pays de l’Europe centrale et orientale et les pays Baltes ont opté pour une rapide et profonde transformation de leurs institutions et ont réussi à diminuer leur retard en termes de productivité par rapport aux pays industrialisés. En revanche, les réformes étaient mises en place plus lentement et étaient moins complètes dans les pays de la Communauté des États indépendants où les écart de productivité restent importants. La littérature existante étudie ce phénomène empiriquement. Cette étude présente un modèle de recherche dynamique qui est à même de répliquer la dynamique décrit ci-dessus. Le modèle démontre l’importance des institutions favorables à la création de nouvelles entreprises de productivité élevée au début de la transition, ce qui confirme l’importance des réformes. Le rôle du secteur public en tant qu’employeur devient plus important en période de transition dans les pays où la mise en place des réformes institutionnelles est particulièrement coûteuse.

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Bibliographic Info

Paper provided by OECD Publishing in its series OECD Economics Department Working Papers with number 773.

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Date of creation: 20 May 2010
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Handle: RePEc:oec:ecoaaa:773-en

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Keywords: transition; productivity; start-ups; dynamic search model; business climate; climat commercial; start-ups; transition; modèle de recherche dynamique; productivité;

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