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Market Concentration and Competition in Eastern Europe


  • David M. Newbery
  • Paul Kattuman


A key feature of Soviet-type economies is the excessive concentration of production and the skewed size distribution of enterprises. This is the root cause of the `soft budget constraint' and a natural outcome of the political economy of these countries. Given entrenched political support for a system which favours producers relative to consumers, it will be hard to pursue an active competition policy, though it is essential for successful reform. We examine a hypothetical restructuring of Polish state enterprises and argue that this should be undertaken before they are privatized. Hungary appears to have started such a process already.
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Suggested Citation

  • David M. Newbery & Paul Kattuman, 1992. "Market Concentration and Competition in Eastern Europe," The World Economy, Wiley Blackwell, vol. 15(3), pages 315-334, May.
  • Handle: RePEc:bla:worlde:v:15:y:1992:i:3:p:315-334

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    References listed on IDEAS

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

    Cited by:

    1. Wendy Carlin & Steven Fries & Mark Schaffer & Paul Seabright, 2001. "Competition and Enterprise Performance in Transition Economies from a Cross-Country Survey," CERT Discussion Papers 0101, Centre for Economic Reform and Transformation, Heriot Watt University.
    2. Mitra, Pradeep & Muravyev, Alexander & Schaffer, Mark E, 2008. "Convergence in Institutions and Market Outcomes: Cross-Country and Time-Series Evidence from the BEEPS Surveys in Transition Economies," IZA Discussion Papers 3863, Institute for the Study of Labor (IZA).
    3. Asaftei, Gabriel & Parmeter, Christopher F., 2010. "Market power, EU integration and privatization: The case of Romania," Journal of Comparative Economics, Elsevier, vol. 38(3), pages 340-356, September.
    4. Barbara M. Roberts, "undated". "Transition and Changes in Industrial Concentration in Poland," Discussion Papers in European Economics 98/4, Department of Economics, University of Leicester.
    5. Albu, Lucian-Liviu & Ivan-Ungureanu, Clementina, 1994. "Coût ou bénéfice de la transition
      [Cost or benefit of the transition]
      ," MPRA Paper 14118, University Library of Munich, Germany.
    6. Saul Estrin, 2001. "Competition and Corporate Governance in Transition," William Davidson Institute Working Papers Series 431, William Davidson Institute at the University of Michigan.
    7. Carlin, Wendy & Fries, Steven & Schaffer, Mark E & Seabright, Paul, 2001. "Competition and Enterprise Performance in Transition Economies: Evidence from a Cross-country Survey," CEPR Discussion Papers 2840, C.E.P.R. Discussion Papers.
    8. Saso Polanec, 2004. "On the Evolution of Size and Productivity in Transition: Evidence from Slovenian Manufacturing Firms," LICOS Discussion Papers 15404, LICOS - Centre for Institutions and Economic Performance, KU Leuven.
    9. Darko Tipurić & Mirjana Pejić Bach, 2009. "Changes in Industrial Concentration in the Croatian Economy (1995-2006)," EFZG Working Papers Series 0903, Faculty of Economics and Business, University of Zagreb.

    More about this item

    JEL classification:

    • L11 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance - - - Production, Pricing, and Market Structure; Size Distribution of Firms
    • L23 - Industrial Organization - - Firm Objectives, Organization, and Behavior - - - Organization of Production
    • O12 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Microeconomic Analyses of Economic Development
    • P23 - Economic Systems - - Socialist Systems and Transition Economies - - - Factor and Product Markets; Industry Studies; Population
    • P51 - Economic Systems - - Comparative Economic Systems - - - Comparative Analysis of Economic Systems
    • P52 - Economic Systems - - Comparative Economic Systems - - - Comparative Studies of Particular Economies


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