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Disorganization in the Transition Process: Firm-Level Evidence from Ukraine

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  • Konings, Jozef
  • Walsh, Patrick Paul

Abstract

Most post-communist economies are characterized by an initial collapse in aggregate output. Blanchard and Kremer (1997) and Roland and Verdier (1997) have recently modelled supply side distortions (disorganization in the links of production) that can lead to a short-term output contraction after market liberalization and a recovery thereafter. This paper is the first to illustrate and test the effects of disorganization in the transition process by using a unique data set of 300 Ukrainian firms. Our results show that, for firms that existed under central planning, disorganization constrains employment and productivity growth during the transition process to a market economy. In contrast, disorganization plays no role in the determination of employment and productivity growth in newly established private firms.

Suggested Citation

  • Konings, Jozef & Walsh, Patrick Paul, 1998. "Disorganization in the Transition Process: Firm-Level Evidence from Ukraine," CEPR Discussion Papers 1928, C.E.P.R. Discussion Papers.
    • Handle: RePEc:cpr:ceprdp:1928
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    References listed on IDEAS

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    1. M Schaffer, 1996. "Job Creation and Job Destruction in a Transition Economy: Ownership," CEP Discussion Papers dp0282, Centre for Economic Performance, LSE.
    2. M. Dewatripont & G. Roland, 1992. "Economic Reform and Dynamic Political Constraints," The Review of Economic Studies, Review of Economic Studies Ltd, vol. 59(4), pages 703-730.
    3. Gérard Roland & Thierry Verdier, 1999. "Transition and the output fall," The Economics of Transition, The European Bank for Reconstruction and Development, vol. 7(1), pages 1-28, March.
    4. J. Konings & H. Lehmann & M.E. Schaffer, 1996. "Job Creation and Job Destruction in a Transition Economy: Ownership, Firm Size," CERT Discussion Papers 9611, Centre for Economic Reform and Transformation, Heriot Watt University.
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    8. Roland, Gerard, 1994. "On the Speed and Sequencing of Privatisation and Restructuring," Economic Journal, Royal Economic Society, vol. 104(426), pages 1158-1168, September.
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    Citations

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    Cited by:

    1. Dalia Marin & Monika Schnitzer, 2007. "Disorganization and Financial Collapse," Palgrave Macmillan Books, in: Erik Berglöf & Gérard Roland (ed.), The Economics of Transition, chapter 4, pages 70-93, Palgrave Macmillan.
    2. Patrick Paul Walsh & Peter McGoldrick, 2005. "Estimating Productivity Dynamics During Institutional Change: An Application To Chinese State Owned Enterprises 1980-1994," Trinity Economics Papers tep14, Trinity College Dublin, Department of Economics.
    3. McGoldrick, Peter & Walsh, P. Paul, 2007. "Successful Factor Market Competition Pre-Privatisation? China`s eclectic.com," Research Technical Papers 3/RT/07, Central Bank of Ireland.
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    6. Peter McGoldrick & Patrick Paul Walsh, 2004. "Reforms and Productivity Dynamics in Chinese State-Owned Enterprises," The Institute for International Integration Studies Discussion Paper Series iiisdp021, IIIS.
    7. Gorodnichenko, Yuriy & Grygorenko, Yegor, 2008. "Are oligarchs productive? Theory and evidence," Journal of Comparative Economics, Elsevier, vol. 36(1), pages 17-42, March.
    8. repec:lic:licosd:23309 is not listed on IDEAS

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    More about this item

    Keywords

    de novo firms; disorganization; transition process;
    All these keywords.

    JEL classification:

    • D0 - Microeconomics - - General
    • O0 - Economic Development, Innovation, Technological Change, and Growth - - General
    • P0 - Political Economy and Comparative Economic Systems - - General

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