Advanced Search
MyIDEAS: Login to save this paper or follow this series

Competition and Enterprise Performance in Transition Economies: Evidence from a Cross-country Survey

Contents:

Author Info

  • Wendy Carlin
  • Steven Fries
  • Mark Schaffer
  • Paul Seabright

Abstract

This paper uses a survey of 3,300 firms in 25 transition countries to shed light on the factors that influence restructuring by firms and their subsequent performance as measured by growth in sales and in sales per employee over a three-year period. We begin by surveying what a decade of transition has taught us about the factors that determine how firms respond to the new market environment. We go on to analyse the impact on performance of ownership, soft budget constraints, the general business environment and a range of measures of the intensity of competition as perceived by a firm. We find that competition has an important and non-monotonic effect on the growth of sales and of labour productivity: some degree of perceived market power is associated with higher sales growth, but competitive pressure is also important. Similar competition effects are found upon firms' decisions to develop and improve their products, but market power has an unambiguously negative impact on purely defensive (cost-reducing) restructuring activity. New firms have grown relatively fast, but among old firms ownership per se has no significant relationship to performance (though state-owned firms have engaged in significantly less development of new products). Soft budget constraints have a broadly negative and the business environment a broadly positive impact on restructuring and performance.

Download Info

If you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.
File URL: http://www.wdi.umich.edu/files/Publications/WorkingPapers/wp376.pdf
Download Restriction: no

Bibliographic Info

Paper provided by William Davidson Institute at the University of Michigan in its series William Davidson Institute Working Papers Series with number 376.

as in new window
Length: pages
Date of creation: 01 May 2001
Date of revision:
Handle: RePEc:wdi:papers:2001-376

Contact details of provider:
Postal: 724 E. University Ave, Wyly Hall 1st Flr, Ann Arbor MI 48109
Phone: 734 763-5020
Fax: 734 763 5850
Email:
Web page: http://www.wdi.umich.edu
More information through EDIRC

Related research

Keywords: competition.restructuring; privatization; soft budget constraints; business environment;

Other versions of this item:

Find related papers by JEL classification:

This paper has been announced in the following NEP Reports:

References

References listed on IDEAS
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.:
as in new window
  1. Claessens, Stijn & Djankov, Simeon, 1999. "Ownership Concentration and Corporate Performance in the Czech Republic," Journal of Comparative Economics, Elsevier, vol. 27(3), pages 498-513, September.
  2. J. A. Hausman & W. E. Taylor, 1980. "Panel Data and Unobservable Individual Effects," Working papers, Massachusetts Institute of Technology (MIT), Department of Economics 255, Massachusetts Institute of Technology (MIT), Department of Economics.
  3. Hare, Paul G & Hughes, Gordon, 1991. "Competitiveness and Industrial Restructuring in Czechoslovakia, Hungary and Poland," CEPR Discussion Papers, C.E.P.R. Discussion Papers 543, C.E.P.R. Discussion Papers.
  4. John Earle & Saul Estrin, 2003. "Privatization, Competition, and Budget Constraints: Disciplining Enterprises in Russia," Economic Change and Restructuring, Springer, Springer, vol. 36(1), pages 1-22, March.
  5. Derek C. Jones & Niels Mygind, 2001. "Ownership and Productive Efficiency: Evidence from Estonia," William Davidson Institute Working Papers Series, William Davidson Institute at the University of Michigan 385, William Davidson Institute at the University of Michigan.
  6. Simeon Djankov & Peter Murrell, 2002. "Enterprise Restructuring in Transition: A Quantitative Survey," Journal of Economic Literature, American Economic Association, American Economic Association, vol. 40(3), pages 739-792, September.
  7. Schaffer, Mark E., 1998. "Do Firms in Transition Economies Have Soft Budget Constraints? A Reconsideration of Concepts and Evidence," Journal of Comparative Economics, Elsevier, vol. 26(1), pages 80-103, March.
  8. Simeon Djankov, 1999. "Ownership Structure and Enterprise Restructuring in Six Newly Independent States," Comparative Economic Studies, Palgrave Macmillan, vol. 41(1), pages 75-95, April.
  9. Grosfeld, I. & Nivet, J. F., 1997. "Wage and Investment Behavior in Transition: Evidence from a Polish Panel Data Set," DELTA Working Papers, DELTA (Ecole normale supérieure) 97-19, DELTA (Ecole normale supérieure).
  10. Blanchard, Olivier & Kremer, Michael, 1997. "Disorganization," The Quarterly Journal of Economics, MIT Press, MIT Press, vol. 112(4), pages 1091-1126, November.
  11. J. David Brown & John S. Earle, 2000. "Competition and Firm Performance: Lessons from Russia," William Davidson Institute Working Papers Series, William Davidson Institute at the University of Michigan 296, William Davidson Institute at the University of Michigan.
  12. Wendy Carlin & Jonathan Haskel & Paul Seabright, 2001. "Understanding ‘The Essential Fact about Capitalism’: Markets, Competition and Creative Destruction," National Institute Economic Review, National Institute of Economic and Social Research, National Institute of Economic and Social Research, vol. 175(1), pages 67-84, January.
  13. Joel S. Hellman & Geraint Jones & Daniel Kaufmann & Mark Schankerman, 2000. "Measuring governance and state capture: the role of bureaucrats and firms in shaping the business environment," Working Papers, European Bank for Reconstruction and Development, Office of the Chief Economist 51, European Bank for Reconstruction and Development, Office of the Chief Economist.
  14. Kattuman, Paul A & Newbery, David M G, 1992. "Market Concentration and Competition in Eastern Europe," CEPR Discussion Papers, C.E.P.R. Discussion Papers 664, C.E.P.R. Discussion Papers.
  15. Roman Frydman & Cheryl Gray & Marek Hessel & Andrzej Rapaczynski, 2000. "The Limits of Discipline: Ownership and Hard Budget Constraints in the Transition Economies," The Economics of Transition, The European Bank for Reconstruction and Development, The European Bank for Reconstruction and Development, vol. 8(3), pages 577-601, November.
  16. Baltagi, Badi H., 1981. "Simultaneous equations with error components," Journal of Econometrics, Elsevier, Elsevier, vol. 17(2), pages 189-200, November.
  17. Claessens, Stijn & Djankov, Simeon, 1999. "Enterprise performance and management turnover in the Czech Republic," European Economic Review, Elsevier, Elsevier, vol. 43(4-6), pages 1115-1124, April.
  18. Boozer, Michael A., 1997. "Econometric Analysis of Panel Data Badi H. Baltagi Wiley, 1995," Econometric Theory, Cambridge University Press, Cambridge University Press, vol. 13(05), pages 747-754, October.
  19. Roman Frydman & Cheryl Gray & Marek Hessel & Andrzej Rapaczynski, 1999. "When Does Privatization Work? The Impact Of Private Ownership On Corporate Performance In The Transition Economies," The Quarterly Journal of Economics, MIT Press, MIT Press, vol. 114(4), pages 1153-1191, November.
  20. Valentijn Bilsen & Jozef Konings, 1997. "Job Creation, Job Destruction and Growth of Newly Established, Privatized and State-Owned Enterprises in Transition Economies: Survey Evidence from Bulgaria, Hungary and Romania," William Davidson Institute Working Papers Series, William Davidson Institute at the University of Michigan 106, William Davidson Institute at the University of Michigan.
  21. Smith, Stephen C. & Cin, Beom-Cheol & Vodopivec, Milan, 1997. "Privatization Incidence, Ownership Forms, and Firm Performance: Evidence from Slovenia," Journal of Comparative Economics, Elsevier, vol. 25(2), pages 158-179, October.
  22. Jones, Derek & Klinedinst, Mark & Rock, Charles, 1998. "Productive Efficiency during Transition: Evidence from Bulgarian Panel Data," Journal of Comparative Economics, Elsevier, vol. 26(3), pages 446-464, September.
  23. Djankov, Simeon, 1999. "Restructuring of insider-dominated firms," Policy Research Working Paper Series 2046, The World Bank.
  24. Earle, John S & Estrin, Saul, 1997. "After Voucher Privatization: The Structure of Corporate Ownership in Russian Manufacturing Industry," CEPR Discussion Papers, C.E.P.R. Discussion Papers 1736, C.E.P.R. Discussion Papers.
  25. Amemiya, Takeshi & MaCurdy, Thomas E, 1986. "Instrumental-Variable Estimation of an Error-Components Model," Econometrica, Econometric Society, Econometric Society, vol. 54(4), pages 869-80, July.
  26. Joel Hellman & Mark Schankerman, 2000. "Intervention, corruption and capture: the nexus between enterprises and the state," Working Papers, European Bank for Reconstruction and Development, Office of the Chief Economist 58, European Bank for Reconstruction and Development, Office of the Chief Economist.
  27. Damien NEVEN & Paul SEABRIGHT, 1995. "Trade Liberalisation and the Co-ordination of Competition Policy," Cahiers de Recherches Economiques du Département d'Econométrie et d'Economie politique (DEEP), Université de Lausanne, Faculté des HEC, DEEP 9503, Université de Lausanne, Faculté des HEC, DEEP.
  28. Joel Hellman & Mark Schankerman, 2000. "Intervention, Corruption and Capture: The Nexus between Enterprises and the State," The Economics of Transition, The European Bank for Reconstruction and Development, The European Bank for Reconstruction and Development, vol. 8(3), pages 545-576, November.
Full references (including those not matched with items on IDEAS)

Citations

Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
as in new window

Cited by:
This item has more than 25 citations. To prevent cluttering this page, these citations are listed on a separate page.

Lists

This item is not listed on Wikipedia, on a reading list or among the top items on IDEAS.

Statistics

Access and download statistics

Corrections

When requesting a correction, please mention this item's handle: RePEc:wdi:papers:2001-376. See general information about how to correct material in RePEc.

For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Laurie Gendron).

If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

If references are entirely missing, you can add them using this form.

If the full references list an item that is present in RePEc, but the system did not link to it, you can help with this form.

If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your profile, as there may be some citations waiting for confirmation.

Please note that corrections may take a couple of weeks to filter through the various RePEc services.