1,364 research outputs found
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Privatisation Methods and Economic Growth in Transition Economies
In low-income countries privatization, if implemented appropriately, may play an
important role in generating growth. Using data recently available from Central and
Eastern Europe, we therefore investigate the impact of alternative methods of
privatization on economic growth. Our analysis suggests that the use of conventional
privatization methods to match owners with firms can be inefficient in economies
with underdeveloped capital markets, particularly if wealth is poorly correlated with
managerial and entrepreneurial ability. In these circumstances mass privatization,
with firms being given away or sold at a nominal price, may be the appropriate policy
choice
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How transition paths differ: enterprise performance in Russia and China
We use enterprise data to analyse and contrast the determinants of enterprise performance
in China and Russia. We find that in China, enterprise growth and efficiency is associated
with rapid increases in factor inputs, but not correlated with ownership or institutional factors.
However, in Russia, enterprise growth is not associated with increases in factor quantity
(except for labor) or quality. The main determinants of company performance are instead
demand and institutional factors at a regional level. We explore possible interpretations of
these results, including the impact of institutional and managerial quality
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Corruption and bureaucratic structure in a developing economy
We address the impact of corruption in a developing economy in the context of an
empirically relevant hold-up problem - when a foreign firm sinks an investment to
provide infrastructure services. We focus on the structure of the economyâs
bureaucracy, which can be centralized or decentralized, and characterize the
âcorruptibilityâ of bureaucrats in each case. Results are explained in terms of the noninternalization,
under decentralization, of the âbribe externalityâ and the âprice
externality.â In welfare terms, decentralization is favoured, relatively speaking, if the
tax system is less inefficient, funding is less tight, bureaucrats are less venal, or
compensation for expropriation is ungenerous
Regulatory barriers and entry in developing economies
We model entry by entrepreneurs into new markets in developing economies with
regulatory barriers in the form of licence fees and bureaucratic delay. Because laissez
faire leads to âexcessiveâ entry, a licence fee can increase welfare by discouraging
entry. However, in the presence of a licence fee, bureaucratic delay creates a strategic
opportunity, which can result in both greater entry by first movers and a higher
steady-state number of firms. Delay also leads to speculation, with entrepreneurs
taking out licences to obtain the option of immediate entry if they later observe the
industry to be profitable enough
Entrepreneurship in transition economies: the role of institutions and generational change
The transition economies have lower rates of entrepreneurship than are observed in most developed and developing market economies. The difference is even more marked in the countries of the former Soviet Union than those of Central and Eastern Europe. We link these differences partly with the legacy of communist planning, which needs to be replaced with formal market-supporting institutions. But many of these developments have now taken place, yet entrepreneurial activity still remains low in many places. To analyse this longer term issue, we highlight the necessarily slow pace of development of new informal institutions and the corresponding social attitudes, notably rebuilding the generalised trust. We argue that changes are even slower in the former Soviet Union than Central and Eastern Europe because communist rule was much longer, leading to a lack of institutional memory. We posit that changes in informal institutions may be therefore delayed until after full generational change
Privatisation versus Competition: Changing Enterprise Behavior in Russia
We investigate whether competitive forces and privatization have yet begun to play an efficiency-enhancing role in Russia. We also explore the economic effects of harder bidget constraints on enterprise behaviour. The empirical work is based on a large enterprise panel of Russian firms 1990-1994, representing around 10% of Russian manufacturing output. We conclude that privatization is having an impact on enterprise efficiency and restructuring but domestic market structure and harder budget constraints for the most part are not. Intriguingly, Russian firms are found to be sensitive to the degree of import penetration.
Size matters: entrepreneurial entry and government
We explore the country-specific institutional characteristics likely to influence an individual's decision to become an entrepreneur. We focus on the size of the government, on freedom from corruption, and on 'market freedom' defined as a cluster of variables related to protection of property rights and regulation. We test these relationships by combining country-level institutional indicators for 47 countries with working age population survey data taken from the Global Entrepreneurship Monitor. Our results indicate that entrepreneurial entry is inversely related to the size of the government, and more weakly to the extent of corruption. A cluster of institutional indicators representing 'market freedom' is only significant in some specifications. Freedom from corruption is significantly related to entrepreneurial entry, especially when the richest countries are removed from the sample but unlike the size of government, the results on corruption are not confirmed by country-level fixed effects models
Entrepreneurial entry: which institutions matter?
In this paper we explore the relationship between the individual decision to become an entrepreneur and the institutional context. We pinpoint the critical roles of property rights and the size of the state sector for entrepreneurial activity and test the relationships empirically by combining country-level institutional indicators for 44 countries with working age population
survey data taken from the Global Enterprise Monitor. A methodological contribution is the use of factor analysis to reduce the statistical problems with the array of highly collinear institutional indicators. We find that the key institutional features that enhance entrepreneurial
activity are indeed the rule of law and limits to the state sector. However, these results are sensitive to the level of development
Better means more: property rights and high-growth aspiration entrepreneurship
This paper contrasts the determinants of entrepreneurial entry and high-growth aspiration entrepreneurship. Using the Global Entrepreneurship Monitor (GEM) surveys for 42 countries over the period 1998-2005, we analyse how institutional environment and entrepreneurial characteristics affect individual decisions to become entrepreneurs and aspirations to set up high-growth ventures. We find that institutions exert different effects on entrepreneurial entry and on the individual choice to launch high-growth aspiration projects. In particular, a strong property rights system is important for high-growth aspiration entrepreneurship, but has less pronounced effects for entrepreneurial entry. The availability of finance and the fiscal burden matter for both
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