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Disorganisation in the Transition Process: Firm Level Evidence from Ukraine

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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 liberalisation 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

  • Jozef Konings & Patrick Paul Walsh, 1998. "Disorganisation in the Transition Process: Firm Level Evidence from Ukraine," LICOS Discussion Papers 7198, LICOS - Centre for Institutions and Economic Performance, KU Leuven.
    • Handle: RePEc:lic:licosd:7198
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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.
    5. Konings, Jozef & Lehmann, Hartmut & Schaffer, Mark E., 1996. "Job creation and job destruction in a transition economy: Ownership, firm size, and gross job flows in Polish manufacturing 1988-1991," Labour Economics, Elsevier, vol. 3(3), pages 299-317, October.
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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.
    9. Konings, Jozef, 1997. "Firm growth and ownership in transition countries," Economics Letters, Elsevier, vol. 55(3), pages 413-418, September.
    10. Nickell, Stephen J, 1996. "Competition and Corporate Performance," Journal of Political Economy, University of Chicago Press, vol. 104(4), pages 724-746, August.
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    12. Konings, Jozef & Repkin, Alexander, 1998. "How Efficient are Firms in Transition Countries? Firm-Level Evidence from Bulgaria and Romania," CEPR Discussion Papers 1839, C.E.P.R. Discussion Papers.
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    Cited by:

    1. Marin, Dalia & Schnitzer, Monika, 2005. "Disorganization and financial collapse," European Economic Review, Elsevier, vol. 49(2), pages 387-408, February.
    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.
    4. Saso Polanec, 2004. "Price Liberalization and Output Decline in Transition," LICOS Discussion Papers 15304, LICOS - Centre for Institutions and Economic Performance, KU Leuven.
    5. repec:tcd:wpaper:tep14 is not listed on IDEAS
    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. Johan F.M. Swinnen & Anneleen Vandeplas & Miet Maertens, 2009. "Liberalization with Endogenous Institutions: A Comparative Analysis of Agricultural Reform in Africa, Asia, and Europe," LICOS Discussion Papers 23309, LICOS - Centre for Institutions and Economic Performance, KU Leuven.

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    More about this item

    Keywords

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

    JEL classification:

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

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