The Impact on Structural Reforms on Employment Growth and Labour Productivity: Evidence from Bulgaria and Romania

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The Impact on Structural Reforms on Employment Growth and Labour Productivity: Evidence from Bulgaria and Romania

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Ralitza Dimova ()

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Ralitza Dimova Dimova

Abstract

Using firm-level data from Bulgaria and Romania, this paper addresses a lacuna in the transition literature, namely, the link of firm-level employment turnover with firm-level growth in labour productivity. The results suggest that while net job creation at the firm level was affected by privatization in Bulgaria, privatization in Romania did not have any effect on firm-level employment growth. Further, Olley-Pakes (1996) decomposition indicates that in Bulgaria, over time, resources moved from less productive firms to more productive firms in almost all industries, but that in Romania such a phenomenon was observed in less than half of the industries. At the same time, the Grilliches-Regev (1995) decomposition indicates that in both these countries mobility of labour across firms, i.e., the process of job creation and job destruction at the firm level, contributed more to productivity changes than did other firm-level characteristics and industry-level factors affecting productivity. Finally, we find that the rate of employment changes in Bulgarian firms has a significant impact on the country’s firm-level productivity changes. Regressions using Romania data, however, do not provide any support for this observation.

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Paper provided by William Davidson Institute at the University of Michigan Stephen M. Ross Business School in its series William Davidson Institute Working Papers Series with number 2003-600.

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Length: 38 pages
Date of creation: 01 Aug 2003
Date of revision:
Handle: RePEc:wdi:papers:2003-600

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Paper
- 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!]

Find related papers by JEL classification:
J63 - Labor and Demographic Economics - - Mobility, Unemployment, and Vacancies - - - Turnover; Vacancies; Layoffs
L21 - Industrial Organization - - Firm Objectives, Organization, and Behavior - - - Business Objectives of the Firm
L25 - Industrial Organization - - Firm Objectives, Organization, and Behavior - - - Firm Performance
L33 - Industrial Organization - - Nonprofit Organizations and Public Enterprise - - - Boundaries of Public and Private Enterprise; Privatization; Contracting Out

This paper has been announced in the following NEP Reports:

NEP-ALL-2003-11-23 (All new papers)
NEP-EEC-2003-11-23 (European Economics)
NEP-TRA-2003-11-23 (Transition Economics)

References listed on IDEAS
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