Have Lower Real Wages Helped Industrial Restructuring in Romania?
A reduction in real wages arising from price liberalisation has been a standard feature of economies undergoing industrial restructuring. In this article, the impact of real wages on industrial performance is examined using a panel dataset of Romanian industries from 1990-96. Using both static and dynamic panel estimation, real wages are found not to be negatively associated with either output or employment. These results are consistent with a view that an institutionalist approach, aimed at improving productivity, may be more likely to achieve the long-term objective of successful industrial restructuring than standard adjustment programmes based on neo-classical theory.
Volume (Year): 39 (2002)
Issue (Month): 1 ()
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