Output and Exports in Transition Economies: A Labour Management Model

CEPR Discussion Paper Series Number 2080

Posted: 3 Jun 1999

See all articles by John Bennett

John Bennett

Brunel University London - Economics and Finance; Institute for the Study of Labor (IZA); University of Wales, Swansea - School of Business and Economics; Centre for Economic Policy Research (CEPR)

Saul Estrin

London School of Economics & Political Science (LSE); Centre for Economic Policy Research (CEPR); IZA Institute of Labor Economics

Paul G. Hare

Heriot-Watt University; CASE, Warsaw

Date Written: February 1999

Abstract

The behaviour of an oligopolistic industry in a transition economy is analysed, assuming that the firms are labour-managed and the economy is open to international trade. The output of these firms is assumed to be of lower quality than the output of Western firms. Cournot equilibrium in the presence of bottlenecks is derived. Such bottlenecks may be particularly damaging because firms respond by cutting exports disproportionately. This may explain why countries, such as those in the former Soviet Union, which have faced serious supply bottlenecks have failed to develop exports while the economies of Central Europe, where materials are more freely available, have seen rapid export growth.

JEL Classification: D21, P31

Suggested Citation

Bennett, John and Estrin, Saul and Hare, Paul, Output and Exports in Transition Economies: A Labour Management Model (February 1999). CEPR Discussion Paper Series Number 2080. Available at SSRN: https://ssrn.com/abstract=155094

John Bennett (Contact Author)

Brunel University London - Economics and Finance ( email )

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+44 1895 816 201 (Phone)
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Institute for the Study of Labor (IZA)

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University of Wales, Swansea - School of Business and Economics ( email )

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Centre for Economic Policy Research (CEPR)

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Saul Estrin

London School of Economics & Political Science (LSE) ( email )

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Centre for Economic Policy Research (CEPR)

London
United Kingdom

IZA Institute of Labor Economics

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Germany

Paul Hare

Heriot-Watt University ( email )

Riccarton
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United Kingdom
0131 451 3483 (Phone)
0131 451 3498 (Fax)

CASE, Warsaw ( email )

Al. Jana Pawła II 61/212
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Poland

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