Privatization, Competition, and Budget Constraints: Disciplining Enterprises in Russia
AbstractWe investigate whether privatization, competitive forces, and the hardening of budget constraints played efficiency-enhancing roles in Russia in the immediate post-privatization period. We find evidence of a positive impact of privatization on labor productivity: a 10% point increase in private share ownership raises real sales per employee by 3â5%. The evidence on product market competition is weaker, depending on model specification. Soft budget constraints are usually found to reduce restructuring but the effect is small and insignificant. We find that in terms of their impacts on productivity, privatization and subsidy reduction are substitutes; privatization and competition (measured as the geographic scope of markets) are complements; and that competition and subsidy reduction are independent. Copyright Kluwer Academic Publishers 2003
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Bibliographic InfoPaper provided by W.E. Upjohn Institute for Employment Research in its series Upjohn Working Papers and Journal Articles with number jse20032.
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Note: Appears in Economics of Planning 36(1): 1-22
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russia; privatization; transition;
Other versions of this item:
- John Earle & Saul Estrin, 2003. "Privatization, Competition, and Budget Constraints: Disciplining Enterprises in Russia," Economic Change and Restructuring, Springer, vol. 36(1), pages 1-22, March.
- P2 - Economic Systems - - Socialist Systems and Transition Economies
- P23 - Economic Systems - - Socialist Systems and Transition Economies - - - Factor and Product Markets; Industry Studies; Population
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