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Wage and Investment Behaviour in Transition: Evidence from a Polish Panel Data Set

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  • Grosfeld, Irena
  • Nivet, Jean-François

Abstract

This paper looks at the behaviour of large industrial firms in Poland in 1988–94. Using a longitudinal enterprise-level data set, we are able to test systematically various hypotheses concerning firms’ reactions to the change in their environment. The results confirm a structural break after the introduction of the package of reforms in 1990. Labour market conditions and product market competition exert important downward pressure on wages. After 1993, however, this initially strong response is weakened. Comparison of wage-setting behaviour across different types of firms confirms important differences in wage negotiation. In state-owned enterprises (SOEs) insiders capture an important part of productivity increases, while in privatized firms there is no positive relationship between firms’ ability to pay and wage increases. Privatization appears important for the strategic dimension of enterprise restructuring. Privatized firms invest more and have greater capacity to ensure higher output growth.

Suggested Citation

  • Grosfeld, Irena & Nivet, Jean-François, 1997. "Wage and Investment Behaviour in Transition: Evidence from a Polish Panel Data Set," CEPR Discussion Papers 1726, C.E.P.R. Discussion Papers.
  • Handle: RePEc:cpr:ceprdp:1726
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    Citations

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    Cited by:

    1. Mickiewicz, Tomasz & Gerry, Christopher J. & Bishop, Kate, 2005. "Privatisation, corporate control and employment growth: Evidence from a panel of large Polish firms, 1996-2002," Economic Systems, Elsevier, vol. 29(1), pages 98-119, March.
    2. Yurii Perevalov & Ilya Gimadii & Vladimir Dobrodei, 2000. "Does Privatisation Improve Performance of Industrial Enterprises? Empirical Evidence from Russia," Post-Communist Economies, Taylor & Francis Journals, vol. 12(3), pages 337-363.
    3. Wendy Carlin & Steven Fries & Mark Schaffer & Paul Seabright, 2001. "Competition and Enterprise Performance in Transition Economies: Evidence from a Cross-country Survey," William Davidson Institute Working Papers Series 376, William Davidson Institute at the University of Michigan.
    4. Rumen Lazarov, 2001. "The Innovative Activity of the Companies (After the Model of Pleven, Lovech, Veliko Tarnovo and Gabrovo Districts)," Economic Studies journal, Bulgarian Academy of Sciences - Economic Research Institute, issue 1, pages 132-158.
    5. Grosfeld, Irena & Nivet, Jean-Francois, 1999. "Insider power and wage setting in transition: Evidence from a panel of large Polish firms, 1988-1994," European Economic Review, Elsevier, vol. 43(4-6), pages 1137-1147, April.
    6. French-German Economic Forum, 1999. "Reduction of Working Time," Working Papers 1999-13, CEPII research center.
    7. 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.
    8. Barbara Blaszczyk & Iraj Hashi & Alexander Radygin & Richard Woodward, 2003. "Corporate Governance and Ownership Structure in the Transition: The Current State of Knowledge and Where to Go from Here," CASE Network Studies and Analyses 0264, CASE-Center for Social and Economic Research.

    More about this item

    Keywords

    Enterprise Behaviour; Insider Effects; Panel Data; Privatization; Transition;

    JEL classification:

    • C23 - Mathematical and Quantitative Methods - - Single Equation Models; Single Variables - - - Models with Panel Data; Spatio-temporal Models
    • D21 - Microeconomics - - Production and Organizations - - - Firm Behavior: Theory
    • P21 - Economic Systems - - Socialist Systems and Transition Economies - - - Planning, Coordination, and Reform

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