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Productivity and factor misallocation in Ukraine: the role of state ownership

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  • Umut Kılın�

Abstract

This study explores firm dynamics and the efficiency of factor allocation in manufacturing and business service sectors of Ukraine. The period under study was one of rapid growth at the economy level, while the main sectors have undergone considerable churn and reallocation. The findings are based on an analysis of firm-level data and display dramatically different pictures for the two main sectors. In business services large establishments that are mostly state-owned use an important portion of production factors inefficiently. Firms need to be very productive to enter the market and, on average, exiting firms are more productive than incumbents in business services. In contrast, in manufacturing industries the market selection mechanism is effective, the state-owned firms are as productive as private establishments and factor allocation is more efficient.

Suggested Citation

  • Umut Kılın�, 2014. "Productivity and factor misallocation in Ukraine: the role of state ownership," Post-Communist Economies, Taylor & Francis Journals, vol. 26(3), pages 359-375, September.
    • Handle: RePEc:taf:pocoec:v:26:y:2014:i:3:p:359-375
    DOI: 10.1080/14631377.2014.937095
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    References listed on IDEAS

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    1. Eric Bartelsman & John Haltiwanger & Stefano Scarpetta, 2004. "Microeconomic Evidence of Creative Destruction in Industrial and Developing Countries," World Bank Publications - Reports 9170, The World Bank Group.
    2. Ackerberg, Daniel & Caves, Kevin & Frazer, Garth, 2006. "Structural identification of production functions," MPRA Paper 38349, University Library of Munich, Germany.
    3. J. David Brown & John S. Earle, 2007. "The Productivity Effects of Privatization in Ukraine: Estimates from Comprehensive Manufacturing Firm Panel Data, 1989–2005," Upjohn Working Papers 07-137, W.E. Upjohn Institute for Employment Research.
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    Cited by:

    1. Ryzhenkov, Mykola, 2016. "Resource misallocation and manufacturing productivity: The case of Ukraine," Journal of Comparative Economics, Elsevier, vol. 44(1), pages 41-55.
    2. Mr. Jacques A Miniane & Ezequiel Cabezon & Mr. Sebastian Weber & Christine J. Richmond & Ms. Dora Benedek & Mr. James Roaf & Mr. Francisco J Parodi & Mr. Peter Dohlman & Rima Turk & Bobana Cegar & Mic, 2019. "Reassessing the Role of State-Owned Enterprises in Central, Eastern and Southeastern Europe," IMF Departmental Papers / Policy Papers 2019/010, International Monetary Fund.

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