Modeling Institutions, Start-Ups And Productivity During Transition
The transition paths from plan to market have varied markedly across countries. Central and Eastern European and the Baltic countries, which opted for a fast and profound transformation of their institutions including business climates, rapidly narrowed the productivity gap with advanced economies. In contrast, in countries of the Commonwealth of Independent States, which embarked on reforms later and contented with less depth, the productivity gap remains substantial. While the literature has focused mainly on empirical studies, this paper develops a dynamic search model of the firm start-ups that is consistent with the above trends. The model shows that an enabling institutional set up stimulates start-ups of highly productive firms at an earlier stage of transition, underscoring the importance of reforms. The role of the state sector as an employer during transition rises in countries where reforming institutions is particularly costly.
|Date of creation:||01 Feb 2010|
|Date of revision:|
|Contact details of provider:|| Postal: 724 E. University Ave, Wyly Hall 1st Flr, Ann Arbor MI 48109|
Phone: 734 763-5020
Fax: 734 763-5850
Web page: http://www.wdi.umich.edu
More information through EDIRC
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- John McMillan & Christopher Woodruff, 2002. "The Central Role of Entrepreneurs in Transition Economies," Journal of Economic Perspectives, American Economic Association, vol. 16(3), pages 153-170, Summer.
- Jan C. van Ours, 2007.
"Compulsion in active labour market programmes,"
National Institute Economic Review,
National Institute of Economic and Social Research, vol. 202(1), pages 67-78, October.
- Benito Arruñada, 2010.
"Pitfalls to Avoid when Measuring Institutions: Is 'Doing Business' Damaging Business?,"
451, Barcelona Graduate School of Economics.
- Arrunada, Benito, 2007. "Pitfalls to avoid when measuring institutions: Is Doing Business damaging business?," Journal of Comparative Economics, Elsevier, vol. 35(4), pages 729-747, December.
- Benito Arruñada, 2007. "Pitfalls to avoid when measuring institutions: Is "Doing Business" damaging business?," Economics Working Papers 1040, Department of Economics and Business, Universitat Pompeu Fabra, revised Apr 2010.
- Jonathan Temple, 2005.
"Dual Economy Models: A Primer For Growth Economists,"
University of Manchester, vol. 73(4), pages 435-478, 07.
- Jonathan Temple, 2005. "Dual economy models: a primer for growth economists," Bristol Economics Discussion Papers 05/574, Department of Economics, University of Bristol, UK.
- Faggio, Giulia & Konings, Jozef, 2001.
"Job Creation, Job Destruction and Employment Growth in Transition Countries in the 90's,"
IZA Discussion Papers
242, Institute for the Study of Labor (IZA).
- Faggio, Giulia & Konings, Jozef, 2003. "Job creation, job destruction and employment growth in transition countries in the 90s," Economic Systems, Elsevier, vol. 27(2), pages 129-154, June.
- Daniel Berkowitz & David N. DeJong, 2005.
"Entrepreneurship and Post-socialist Growth,"
Oxford Bulletin of Economics and Statistics,
Department of Economics, University of Oxford, vol. 67(1), pages 25-46, 02.
- Aidis, Ruta & Estrin, Saul & Mickiewicz, Tomasz, 2009.
"Entrepreneurial Entry: Which Institutions Matter?,"
IZA Discussion Papers
4123, Institute for the Study of Labor (IZA).
- Castanheira, Micael & Roland, Gerard, 2000.
"The Optimal Speed of Transition: A General Equilibrium Analysis,"
International Economic Review,
Department of Economics, University of Pennsylvania and Osaka University Institute of Social and Economic Research Association, vol. 41(1), pages 219-39, February.
- Micael Castanheira De Moura & Gérard Roland, 2000. "The optimal speed of transition: a general equilibrium analysis," ULB Institutional Repository 2013/10011, ULB -- Universite Libre de Bruxelles.
- Castanheira, Micael & Roland, Gérard, 1996. "The Optimal Speed of Transition: A General Equilibrium Analysis," CEPR Discussion Papers 1442, C.E.P.R. Discussion Papers.
- Ariane Tichit, 2006.
"The optimal speed of transition revisited,"
- Douglas Gollin, 2001.
"Nobody's Business but My Own: Self Employment and Small Enterprise in Economic Development,"
Center for Development Economics
172, Department of Economics, Williams College.
- Gollin, Douglas, 2008. "Nobody's business but my own: Self-employment and small enterprise in economic development," Journal of Monetary Economics, Elsevier, vol. 55(2), pages 219-233, March.
- Mitra, Pradeep & Muravyev, Alexander & Schaffer, Mark E., 2009. "Convergence in institutions and market outcomes: cross-country and time-series evidence from the business environment and enterprise performance surveys in transition economies," Policy Research Working Paper Series 4819, The World Bank.
- Andrew Atkeson & Patrick J. Kehoe, 1993.
"Social Insurance and Transition,"
NBER Working Papers
4411, National Bureau of Economic Research, Inc.
- Wanchek, Tanya, 2009. "Exports and legal institutions: exploring the connection in transition economies," Journal of Institutional Economics, Cambridge University Press, vol. 5(01), pages 89-115, April.
- Jurajda, Stepán & Terrell, Katherine, 2008. "Job Reallocation in Two Cases of Massive Adjustment in Eastern Europe," World Development, Elsevier, vol. 36(11), pages 2144-2169, November.
- Zuzana Brixiova & Vera Volchok, 2003. "Labor Markets in Belarus," Problems of Economic Transition, M.E. Sharpe, Inc., vol. 48(1), pages 56-67, January.
- Mitchel Y. Abolafia (ed.), 2005. "Markets," Books, Edward Elgar, number 2788.
- Klapper, Leora & Laeven, Luc & Rajan, Raghuram, 2006. "Entry regulation as a barrier to entrepreneurship," Journal of Financial Economics, Elsevier, vol. 82(3), pages 591-629, December.
- De Loecker, Jan & Konings, Jozef, 2006. "Job reallocation and productivity growth in a post-socialist economy: Evidence from Slovenian manufacturing," European Journal of Political Economy, Elsevier, vol. 22(2), pages 388-408, June.
- Gylfason, Thorvaldur & Hochreiter, Eduard, 2009.
"Growing apart? A tale of two republics: Estonia and Georgia,"
European Journal of Political Economy,
Elsevier, vol. 25(3), pages 355-370, September.
- Thorvaldur Gylfason & Eduard Hochreiter, 2008. "Growing Apart? A Tale of Two Republics: Estonia and Georgia," IMF Working Papers 08/235, International Monetary Fund.
- Thorvaldur Gylfason & Eduard Hochreiter, 2007. "Growing Apart? A Tale of Two Republics: Estonia and Georgia," CESifo Working Paper Series 2155, CESifo Group Munich.
- Fonseca, Raquel & Lopez-Garcia, Paloma & Pissarides, Christopher A., 2001. "Entrepreneurship, start-up costs and employment," European Economic Review, Elsevier, vol. 45(4-6), pages 692-705, May.
- Claustre Bajona & Luis Locay, 2009.
"Entrepreneurship and Productivity: The Slow Growth of the Planned Economies,"
Review of Economic Dynamics,
Elsevier for the Society for Economic Dynamics, vol. 12(3), pages 505-522, July.
- Claustre Bajona & Luis Locay, 2009. "Code files for "Entrepreneurship and Productivity: The Slow Growth of the Planned Economies"," Computer Codes 08-46, Review of Economic Dynamics.
When requesting a correction, please mention this item's handle: RePEc:wdi:papers:2010-975. See general information about how to correct material in RePEc.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Laurie Gendron)
If references are entirely missing, you can add them using this form.