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
Date Written: November 1999
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