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Output and Exports in Transition Economies: A Labour Management Model

  • Estrin, Saul
  • Hare, Paul G

The behaviour of an oligopolistic industry in a transition economy is analysed, assuming that the firms are labour-managed and the economy is open to international trade. The output of these firms is assumed to be of lower quality than the output of Western firms. Cournot equilibrium in the presence of bottlenecks is derived. Such bottlenecks may be particularly damaging because firms respond by cutting exports disproportionately. This may explain why countries, such as those in the former Soviet Union, which have faced serious supply bottlenecks have failed to develop exports while the economies of Central Europe, where materials are more freely available, have seen rapid export growth.

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Paper provided by C.E.P.R. Discussion Papers in its series CEPR Discussion Papers with number 2080.

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Date of creation: Feb 1999
Date of revision:
Handle: RePEc:cpr:ceprdp:2080
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  1. Hill, Martyn & Waterson, Michael, 1983. "Labor-managed Cournot oligopoly and industry output," Journal of Comparative Economics, Elsevier, vol. 7(1), pages 43-51, March.
  2. Katsoulacos Yannis, 1994. "Firms' Objectives in Transition Economies," Journal of Comparative Economics, Elsevier, vol. 19(3), pages 392-409, December.
  3. Neary, Hugh M., 1984. ""Labor-managed cournot oligopoly and industry output": A comment," Journal of Comparative Economics, Elsevier, vol. 8(3), pages 322-327, September.
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  8. Aturupane, Chonira & Djankov, Simeon & Hoekman, Bernard, 1997. "Determinants of intra-industry trade between East and West Europe," Policy Research Working Paper Series 1850, The World Bank.
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  13. Horowitz, Ira, 1991. "On the effects of cournot rivalry between entrepreneurial and cooperative firms," Journal of Comparative Economics, Elsevier, vol. 15(1), pages 115-121, March.
  14. Svejnar, Jan, 1982. "On the theory of a participatory firm," Journal of Economic Theory, Elsevier, vol. 27(2), pages 313-330, August.
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  18. Laffont, Jean-Jacques & Moreaux, Michel, 1985. "Large-Market Cournot Equilibria in Labour-managed Economies," Economica, London School of Economics and Political Science, vol. 52(206), pages 153-65, May.
  19. Wendy Carlin & Micheal Landesmann, 1998. "From Theory into Practice? Restructuring and Dynamism in Transition Economies," William Davidson Institute Working Papers Series 155, William Davidson Institute at the University of Michigan.
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