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Competitiveness and Industrial Restructuring in Czechoslovakia, Hungary and Poland

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  • Hare, Paul G
  • Hughes, Gordon

Abstract

Transition to the market in Eastern Europe will require a great deal of restructuring of production involving the contraction and even closure of certain branches and the expansion of others, including some new ones. In the course of this, many enterprises will have to be shut down. Unfortunately, even in the countries which have already undergone substantial price liberalization, there are still many distortions in the price system due to monopoly, remaining subsidies on production, and taxes related to trade (e.g. import duties). Consequently, evaluation of the profitability of firms or the branches in which they operate is likely to yield very misleading results if carried out at domestic prices. Accordingly, using detailed input-output data and information on world market prices for Czechoslovakia, Hungary and Poland, this paper seeks to recalculate value added for each branch in terms of world market prices. Having done this, domestic resource costs are calculated to allow branches to be ranked according to their profitability. The paper then examines the most profitable and least profitable branches in each country in some detail.

Suggested Citation

  • Hare, Paul G & Hughes, Gordon, 1991. "Competitiveness and Industrial Restructuring in Czechoslovakia, Hungary and Poland," CEPR Discussion Papers 543, C.E.P.R. Discussion Papers.
  • Handle: RePEc:cpr:ceprdp:543
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    Citations

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    Cited by:

    1. Mihályi, Péter, 2000. "Privatizáció és globalizáció avagy az Anti-equlibrium újrafelfedezése
      [Privatization and globalization or the rediscovery of Anti-Equilibrium]
      ," Közgazdasági Szemle (Economic Review - monthly of the Hungarian Academy of Sciences), Közgazdasági Szemle Alapítvány (Economic Review Foundation), vol. 0(11), pages 859-877.
    2. Misala, Józef, 1992. "Importance and patterns of Poland's trade with Germany," Kiel Working Papers 537, Kiel Institute for the World Economy (IfW).
    3. Fabian Gouret, 2003. "Méthodes de privatisation et évolution de l'output dans les économies en transition," Cahiers de la Maison des Sciences Economiques j04028, Université Panthéon-Sorbonne (Paris 1).
    4. Wladimir Andreff, 2004. "Would a Second Transition Stage Prolong the Initial Period of Post-socialist Economic Transformation into Market Capitalism?," European Journal of Comparative Economics, Cattaneo University (LIUC), vol. 1(1), pages 7-31, June.
    5. Schmieding, Holger, 1991. "From socialism to an institutional void: Notes on the nature of the transformation crisis," Kiel Working Papers 480, Kiel Institute for the World Economy (IfW).
    6. Daniel LINOTTE, 1993. "Changements Structurels Et Privatisation Dans Les Économies En Transition," Annals of Public and Cooperative Economics, Wiley Blackwell, vol. 64(3), pages 311-328, July.
    7. 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.
    8. Heinrich, Ralph P., 1993. "Microeconomic adjustment in Hungary: Results from a survey of enterprises," Kiel Working Papers 599, Kiel Institute for the World Economy (IfW).
    9. Naujoks, Petra & Schmidt, Klaus-Dieter, 1995. "Foreign direct investment and trade in transition countries: Tracing links – A sequel," Kiel Working Papers 704, Kiel Institute for the World Economy (IfW).
    10. Dariusz K. Rosati, 1994. "Output decline during transition from plan to market: a reconsideration," The Economics of Transition, The European Bank for Reconstruction and Development, vol. 2(4), pages 419-441, December.
    11. Holger Schmieding, 1993. "From plan to market: On the nature of the transformation crisis," Review of World Economics (Weltwirtschaftliches Archiv), Springer;Institut für Weltwirtschaft (Kiel Institute for the World Economy), vol. 129(2), pages 216-253, June.
    12. Fabian Gouret, 2004. "The Macroeconomics of Massive Giveaways," Development and Comp Systems 0403001, EconWPA.
    13. Naujoks, Petra & Schmidt, Klaus-Dieter, 1995. "Foreign direct investment and trade in transition countries: Tracing links," Kiel Working Papers 667, Kiel Institute for the World Economy (IfW).
    14. Gaasbeek, P.B. & van Bergeijk, P.A.G., 2011. "Chinese competition," ISS Working Papers - General Series 22630, International Institute of Social Studies of Erasmus University Rotterdam (ISS), The Hague.
    15. 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.
    16. Schmieding, Holger, 1991. "External protection for the emerging market economies? The case for financial liberalisation instead of import barriers in Eastern Europe," Kiel Working Papers 498, Kiel Institute for the World Economy (IfW).
    17. Jan Svejnar, 1991. "Microeconomic Issues in the Transition to a Market Economy," Journal of Economic Perspectives, American Economic Association, vol. 5(4), pages 123-138, Fall.
    18. Brauer, Holger & Falk, Martin & Raiser, Martin, 1996. "Labour markets in Poland and Hungary five years from the start of transition: Evidence from monthly data," Kiel Working Papers 742, Kiel Institute for the World Economy (IfW).
    19. Mathias Dewatripont & Gérard Roland, 1996. "Transition as a process of large-scale institutional change," The Economics of Transition, The European Bank for Reconstruction and Development, vol. 4(1), pages 1-30, May.
    20. Raiser, Martin, 1992. "Soft budget constraints: An institutional interpretation of stylised facts in economic transformation in Central Eastern Europe," Kiel Working Papers 549, Kiel Institute for the World Economy (IfW).

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