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Industrial Restructuring in Russia. Early Reactions of Firms to the Shock of Liberalization


  • Senik-Leygonie, C.
  • Duflo, E.


This paper looks at the reaction of Russian firsm to the shock of liberalization. Firms are exposed to two kinds of shocks. A supply affects their profitability. A demand shock reflects the new expression of consumers and the opening of the country to foreign competition. Econometric tests show that firms adapt to these changes. They react by adjusting their output. They are not able to change their production techniques for lack of fresh capital. Employment is more stable that output: it is preserved by the adjustment of real wages. Therefore, firms with a low share of material inputs are relatively better off. Copyright The European Bank for Reconstruction and Development, 1997.
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Suggested Citation

  • Senik-Leygonie, C. & Duflo, E., 1995. "Industrial Restructuring in Russia. Early Reactions of Firms to the Shock of Liberalization," DELTA Working Papers 95-33, DELTA (Ecole normale supérieure).
  • Handle: RePEc:del:abcdef:95-33

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    References listed on IDEAS

    1. Saint-Paul, Gilles, 2002. "Employment protection, international specialization, and innovation," European Economic Review, Elsevier, vol. 46(2), pages 375-395, February.
    2. Dornbusch, Rudiger & Fischer, Stanley & Samuelson, Paul A, 1977. "Comparative Advantage, Trade, and Payments in a Ricardian Model with a Continuum of Goods," American Economic Review, American Economic Association, vol. 67(5), pages 823-839, December.
    3. Hopenhayn, Hugo & Rogerson, Richard, 1993. "Job Turnover and Policy Evaluation: A General Equilibrium Analysis," Journal of Political Economy, University of Chicago Press, vol. 101(5), pages 915-938, October.
    4. Alison Butler, 1992. "Is the United States losing its dominance in high-technology industries?," Review, Federal Reserve Bank of St. Louis, issue Nov, pages 19-34.
    5. Lucas, Robert Jr., 1988. "On the mechanics of economic development," Journal of Monetary Economics, Elsevier, vol. 22(1), pages 3-42, July.
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    JEL classification:

    • L30 - Industrial Organization - - Nonprofit Organizations and Public Enterprise - - - General
    • L32 - Industrial Organization - - Nonprofit Organizations and Public Enterprise - - - Public Enterprises; Public-Private Enterprises
    • L33 - Industrial Organization - - Nonprofit Organizations and Public Enterprise - - - Comparison of Public and Private Enterprise and Nonprofit Institutions; Privatization; Contracting Out


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