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Industrial Economics of the Transition: Determinants of Enterprise Efficiency in Czechoslovakia and Hungary

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  • Brada, Josef C
  • King, Arthur E
  • Ma, Chia Ying

Abstract

Firm-level data are employed to estimate frontier production functions for Czechoslovak industry in 1990 and for Hungarian industry in 1991. In both countries, there is evidence of inefficient firms, with the distribution of efficiency characterized by a small number of inefficient outliers. Enterprise efficiency is positively related to firm size and negatively to managerial effort expended in lobbying for easier targets but export orientation has no effect on efficiency. Most importantly, in Hungary's more reformed economy, efficient firms are more profitable, while profit redistribution by the center in Czechoslovakia led to an inverse relationship between efficiency and profitability. Copyright 1997 by Royal Economic Society.

Suggested Citation

  • Brada, Josef C & King, Arthur E & Ma, Chia Ying, 1997. "Industrial Economics of the Transition: Determinants of Enterprise Efficiency in Czechoslovakia and Hungary," Oxford Economic Papers, Oxford University Press, vol. 49(1), pages 104-127, January.
  • Handle: RePEc:oup:oxecpp:v:49:y:1997:i:1:p:104-27
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    Cited by:

    1. Gabor Korosi & Laszlo Halpern, 2000. "Efficiency and Market Share in Hungarian Corporate Sector," IEHAS Discussion Papers 0009, Institute of Economics, Centre for Economic and Regional Studies, Hungarian Academy of Sciences.
    2. Kate Bishop & Igor Filatotchev & Tomasz Mickiewicz, 2002. "Endogenous ownership structure: factors affecting the post-privatisation equity in largest Hungarian firms," UCL SSEES Economics and Business working paper series 5, UCL School of Slavonic and East European Studies (SSEES).
    3. Mats GRANÉR & Anders ISAKSSON, 2009. "Firm Efficiency And The Destination Of Exports: Evidence From Kenyan Plant-Level Data," The Developing Economies, Institute of Developing Economies, vol. 47(3), pages 279-306.
    4. Chih-Hai Yang & Ku-Hsieh Chen, 2009. "Are small firms less efficient?," Small Business Economics, Springer, vol. 32(4), pages 375-395, April.
    5. Wu, Zai Bin & Yeung, Godfrey & Mok, Vincent & Han, Zhaozhou, 2007. "Firm-specific knowledge and technical efficiency of watch and clock manufacturing firms in China," International Journal of Production Economics, Elsevier, vol. 107(2), pages 317-332, June.
    6. Hanousek, Jan & Kočenda, Evžen & Mašika, Michal, 2012. "Firm efficiency: Domestic owners, coalitions, and FDI," Economic Systems, Elsevier, vol. 36(4), pages 471-486.
    7. ., 2013. "The Needham Puzzle, the Weber Question and China's Miracle: Long Term Performance since the Sung Dynasty," Chapters,in: World Economic Performance, chapter 3, pages 42-87 Edward Elgar Publishing.
    8. A. Tonini, 2012. "A Bayesian stochastic frontier: an application to agricultural productivity growth in European countries," Economic Change and Restructuring, Springer, vol. 45(4), pages 247-269, November.
    9. Sangho Kim, 2003. "Identifying And Estimating Sources Of Technical Inefficiency In Korean Manufacturing Industries," Contemporary Economic Policy, Western Economic Association International, vol. 21(1), pages 132-144, January.
    10. Pursey Heugens & Stelios Zyglidopoulos, 2008. "From social ties to embedded competencies: the case of business groups," Journal of Management & Governance, Springer;Accademia Italiana di Economia Aziendale (AIDEA), vol. 12(4), pages 325-341, November.
    11. Jones, Derek & Klinedinst, Mark & Rock, Charles, 1998. "Productive Efficiency during Transition: Evidence from Bulgarian Panel Data," Journal of Comparative Economics, Elsevier, vol. 26(3), pages 446-464, September.
    12. repec:eee:asieco:v:53:y:2017:i:c:p:18-36 is not listed on IDEAS
    13. Astrid Cullmann & Christian von Hirschhausen, 2007. "From Transition to Competition: Dynamic Efficiency Analysis of Polish Electricity Distribution Companies," Discussion Papers of DIW Berlin 716, DIW Berlin, German Institute for Economic Research.
    14. 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.
    15. repec:rej:journl:v:19:y:2016:i:61:p:71-94 is not listed on IDEAS
    16. Randall K. Filer & Jan Hanousek, 2002. "Data Watch: Research Data from Transition Economies," Journal of Economic Perspectives, American Economic Association, vol. 16(1), pages 225-240, Winter.
    17. Jan Hanousek & Evžen Kočenda & Michal Mašika, 2012. "Firemní efektivita: vliv vlastnických struktur a finančních ukazatelů
      [Corporate Efficiency: Effect of Ownership Structures and Financial Indicators]
      ," Politická ekonomie, University of Economics, Prague, vol. 2012(4), pages 459-483.
    18. Bezat, Agnieszka, 2011. "Estimation of technical efficiency by application of the SFA method for panel data," Problems of World Agriculture / Problemy Rolnictwa Światowego, Wydział Nauk Ekonomicznych, Uniwersytet Warszawski, vol. 11(26).
    19. Jan Hanousek & Evzen Kocenda, 2016. "FDI and Ownership in Czech Firms: Pre- and Post-crisis Efficiency," KIER Working Papers 942, Kyoto University, Institute of Economic Research.
    20. Piesse, Jenifer & Thirtle, Colin, 2000. "A Stochastic Frontier Approach to Firm Level Efficiency, Technological Change, and Productivity during the Early Transition in Hungary," Journal of Comparative Economics, Elsevier, vol. 28(3), pages 473-501, September.

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