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Disorganization in the process of transition

Author

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  • Jozef Konings
  • Patrick Paul Walsh

Abstract

Most post‐communist economies are characterized by an initial collapse in aggregate output. Blanchard and Kremer (1997) and Roland and Verdier (1997) have recently modelled supply‐side distortions – disorganization in the links of production – that can lead to a short‐term output contraction after market liberalization and a recovery thereafter. This paper is the first to illustrate and test the effects of disorganization in the transition process by using a unique dataset of 300 Ukrainian firms. Our results show that for firms that existed under central planning, disorganization constrains employment and productivity growth during the transition process to a market economy. We also show that the effects of disorganization are greater the more out‐dated the capital stock inheritance from the planning system. In contrast, disorganization plays no role in the determination of employment and productivity growth in newly established private firms. JEL classification: P0, O0, D0.

Suggested Citation

  • Jozef Konings & Patrick Paul Walsh, 1999. "Disorganization in the process of transition," The Economics of Transition, The European Bank for Reconstruction and Development, vol. 7(1), pages 29-46, March.
  • Handle: RePEc:bla:etrans:v:7:y:1999:i:1:p:29-46
    DOI: 10.1111/1468-0351.00003
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    File URL: https://doi.org/10.1111/1468-0351.00003
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    Citations

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    Cited by:

    1. Faggio, Giulia, 2007. "Job destruction, job creation and unemployment in transition countries: what can we learn?," LSE Research Online Documents on Economics 19716, London School of Economics and Political Science, LSE Library.
    2. Yueping Song & Xiao-Yuan Dong, 2013. "Gender and Occupational Mobility in Urban China during the Economic Transition," Research in Labor Economics, in: Corrado Giulietti & Konstantinos Tatsiramos & Klaus F. Zimmermann (ed.),Labor Market Issues in China, volume 37, pages 93-122, Emerald Publishing Ltd.
    3. Jozef Konings & Olga Kupets & Hartmut Lehmann, 2002. "Gross Job Flows in Ukraine: Size, Ownership and Trade Effects," William Davidson Institute Working Papers Series 521, William Davidson Institute at the University of Michigan.
    4. Johan F.M. Swinnen & Anneleen Vandeplas, 2010. "Market power and rents in global supply chains," Agricultural Economics, International Association of Agricultural Economists, vol. 41(s1), pages 109-120, November.
    5. Dries, Liesbeth & Germenji, Etleva & Noev, Nivelin & Swinnen, Johan F.M., 2009. "Farmers, Vertical Coordination, and the Restructuring of Dairy Supply Chains in Central and Eastern Europe," World Development, Elsevier, vol. 37(11), pages 1742-1758, November.
    6. Falkowski, Jan, 2014. "The economic effects of radical reorganisation of the agro-food supply chain: some evidence from Poland," 2014 International Congress, August 26-29, 2014, Ljubljana, Slovenia 182713, European Association of Agricultural Economists.
    7. Alan A. Bevan & Saul Estrin & Paul G. Hare & Jon Stern, 2001. "Extending the economics of disorganization," The Economics of Transition, The European Bank for Reconstruction and Development, vol. 9(1), pages 105-114, March.
    8. World Bank, 2005. "The Dynamics of Vertical Coordination in Agrifood Chains in Eastern Europe and Central Asia : Implications for Policy and World Bank Operations," World Bank Other Operational Studies 8806, The World Bank.
    9. Sergei Guriev & Barry W. Ickes, 2000. "Microeconomic Aspects of Economic Growth in Eastern Europe and the Former Soviet Union, 1950-2000," William Davidson Institute Working Papers Series 348, William Davidson Institute at the University of Michigan.
    10. Kalyuzhnova, Yelena & Vagliasindi, Maria, 2006. "Capacity utilization of the Kazakhstani firms and the Russian financial crisis: A panel data analysis," Economic Systems, Elsevier, vol. 30(3), pages 231-248, October.
    11. M. A. Baqui Khalily & Abdul Khaleque, 2013. "Access to Credit and Productivity of Enterprises in Bangladesh: Is there Causality?," Working Papers 20, Institute of Microfinance (InM).
    12. Jozef Konings & Olga Kupets & Hartmut Lehmann, 2003. "Gross job flows in Ukraine," The Economics of Transition, The European Bank for Reconstruction and Development, vol. 11(2), pages 321-356, June.

    More about this item

    JEL classification:

    • P0 - Economic Systems - - General
    • O0 - Economic Development, Innovation, Technological Change, and Growth - - General
    • D0 - Microeconomics - - General

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