Property Rights, Finance and Entrepreneurship

Johnson, Simon; McMillan, John; Woodruff, Christopher M.

Property Rights, Finance and Entrepreneurship

Conference Paper, The Nobel Symposium in Economics - The Economics of Transition, Stockholm, September 1999, CESifo Working Paper Series No. 212

50 Pages Posted: 1 Dec 1999

See all articles by Simon Johnson

Simon Johnson

Massachusetts Institute of Technology (MIT) - Entrepreneurship Center; National Bureau of Economic Research (NBER)

John McMillan

CESifo (Center for Economic Studies and Ifo Institute)

Christopher M. Woodruff

University of California, San Diego (UCSD) - Graduate School of International Relations and Pacific Studies (IRPS)

Date Written: November 1999

Abstract

Is investment constrained more by insecure property rights or by limited external finance; For five transition economies in Eastern Europe and the former Soviet Union we find that weak property rights limit the reinvestment of profits in startup manufacturing firms. Access to credit does not appear to explain differences in investment. At least in the early stages of post-communist reform, retained earnings appear to have been enough to finance the investments that managers wanted to make.

JEL Classification: G31, G32, G34

Suggested Citation: Suggested Citation

Johnson, Simon and McMillan, John and Woodruff, Christopher, Property Rights, Finance and Entrepreneurship (November 1999). Conference Paper, The Nobel Symposium in Economics - The Economics of Transition, Stockholm, September 1999, CESifo Working Paper Series No. 212. Available at SSRN: https://ssrn.com/abstract=198409