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Institutions, economic liberalization and firm growth: evidence from European transition economies

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  • Evgeni Peev

Abstract

This article investigates the determinants of firm growth using a dataset matching firm-level data with country indicators of access to external finance, governance, and economic liberalization in ten European transition countries over the period 1996–2011. We find that the quality of state rebuilding after the collapse of communism matters. First, country governance adds something above the impact of a change in variables that proxy for access the external finance. Second, the results also show that economic liberalization has no direct effect on firm growth. Instead, its impact operates through country governance. The countries that benefit the most in terms of firm growth are those with higher than average country governance indicators. Copyright Springer Science+Business Media New York 2015

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  • Evgeni Peev, 2015. "Institutions, economic liberalization and firm growth: evidence from European transition economies," European Journal of Law and Economics, Springer, vol. 40(1), pages 149-174, August.
    • Handle: RePEc:kap:ejlwec:v:40:y:2015:i:1:p:149-174
    DOI: 10.1007/s10657-014-9450-3
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    Cited by:

    1. Besnik A. Krasniqi & Sameeksha Desai, 2016. "Institutional drivers of high-growth firms: country-level evidence from 26 transition economies," Small Business Economics, Springer, vol. 47(4), pages 1075-1094, December.
    2. Falavigna, G. & Ippoliti, R., 2025. "Does location matter in corporate finance? An empirical investigation on manufacturing SMEs and the consequences of being on the “wrong” side of the institutional border," Journal of Economics and Business, Elsevier, vol. 136(C).
    3. Miloš Božović, 2021. "Judicial efficiency and loan performance: micro evidence from Serbia," European Journal of Law and Economics, Springer, vol. 52(1), pages 33-56, August.
    4. Calabrò, Andrea & Requejo, Ignacio & Reyes-Reina, Fernando & Sanchez-Bueno, Maria J. & Suárez-González, Isabel, 2024. "Nearby or faraway? Determinants of target selection in family firm acquisitions," International Business Review, Elsevier, vol. 33(4).
    5. Tim Lohse & Christian Thomann, 2015. "Are bad times good news for the Securities and Exchange Commission?," European Journal of Law and Economics, Springer, vol. 40(1), pages 33-47, August.

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    JEL classification:

    • P31 - Political Economy and Comparative Economic Systems - - Socialist Institutions and Their Transitions - - - Socialist Enterprises and Their Transitions
    • H70 - Public Economics - - State and Local Government; Intergovernmental Relations - - - General
    • L50 - Industrial Organization - - Regulation and Industrial Policy - - - General

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