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Capital accumulation during the transition from plan to market


  • Rumen Dobrinsky


This paper focuses on the process of capital accumulation and the forces that drive it in the countries undergoing the transition from plan to market. The methodological framework for analyzing the determinants of aggregate business investment draws on the neoclassical accelerator model, extending it to reflect some of the specificities of the transition environment. The model is estimated on data for the economies in Central and Eastern Europe (CEE) and the Commonwealth of Independent States (CIS). The results highlight the role of some key drivers of capital accumulation in an economy in transition, in particular, the relatively significant accelerator response to output, the importance of adjustment effects and financing constraints and the relatively minor role of the cost of capital. Copyright (c) 2007 The Author Journal compilation (c) 2007 The European Bank for Reconstruction and Development .

Suggested Citation

  • Rumen Dobrinsky, 2007. "Capital accumulation during the transition from plan to market," The Economics of Transition, The European Bank for Reconstruction and Development, vol. 15, pages 845-868, October.
  • Handle: RePEc:bla:etrans:v:15:y:2007:i::p:845-868

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    References listed on IDEAS

    1. Rumen Dobrinsky, 2005. "Domestic Savings and the Driving Forces of Investment in the ECE Emerging Market Economies," ECE Discussion Papers Series 2005_2, UNECE.
    2. Elisabetta Bertero & Laura Rondi, 1998. "Managerial discretion and investment decisions of state-owned firms: Evidence from a panel of italian companies," CERIS Working Paper 199807, Institute for Economic Research on Firms and Growth - Moncalieri (TO) ITALY -NOW- Research Institute on Sustainable Economic Growth - Moncalieri (TO) ITALY.
    3. Stephen Bond & Julie Elston & Jacques Mairesse & Benoit Mulkay, 1997. "Financial factors and investment in Belgium, France, German and the UK: A comparison using company panel data," IFS Working Papers W97/08, Institute for Fiscal Studies.
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    Cited by:

    1. Zinych, Nataliya & Odening, Martin, 2009. "How Costly are (Agricultural) Investments during Economic Transition? A Critical Literature Appraisal," 2009 Conference, August 16-22, 2009, Beijing, China 50319, International Association of Agricultural Economists.
    2. Annageldy Arazmuradov, 2015. "Can Development Aid Help Promote Foreign Direct Investment? Evidence from Central Asia," Economic Affairs, Wiley Blackwell, vol. 35(1), pages 123-136, February.
    3. Annageldy Arazmuradov, 2012. "Foreign Aid, Foreign Direct Investment, and Domestic Investment Nexus in Landlocked Economies of Central Asia," Economic Research Guardian, Weissberg Publishing, vol. 2(1), pages 129-151, May.

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