The Effect of Ownership and Competitive Pressure on Firm Performance in Transition Countries, Micro Evidence from Bulgaria, Romania and Poland

Posted: 13 Sep 2001  

Saul Estrin

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

Jozef Konings

Catholic University of Leuven (KUL) - LICOS - Centrum voor Transitie-economie; Centre for Economic Policy Research (CEPR); IZA Institute of Labor Economics

Zbigniew Zolkiewski

NOBE - Independent Center for Economic Studies; Central Statistical Office, Warsaw

Manuela Angelucci

University of Michigan - Department of Economics; Institute for the Study of Labor (IZA)

Multiple version iconThere are 3 versions of this paper

Date Written: May 31, 2001

Abstract

This paper uses a unique representative firm level data set to analyse the effect of domestic and international competitive pressure and ownership changes in three emerging economies, Bulgaria Poland and Romania. Our main findings can be summarized as follows: Domestic competitive pressure, measured by market structure, and increased import penetration are associated with higher firm performance in Poland irrespective of the ownership structure of firms. Furthermore the positive effects of increased import competition are reinforced for foreign owned firms. In contrast, in Bulgaria and Romania, increased import penetration is associated with lower firm performance, while there is some evidence that more competitive market structures are associated with higher total factor productivity. However, these effects depend on the ownership structure of firms, which suggests the existence of complementarities between competitive pressure and ownership changes. The results also indicate that privatisation has positive effects on firm performance. In particular, domestic private firms and foreign owned firms outperform state owned firms. Furthermore, there is evidence that foreign owned firms do better than domestically owned private firms especially in Bulgaria and Poland. The results on ownership are somewhat weaker for Romania.

Keywords: competitive pressure, privatisation, firm performance

JEL Classification: D24, D40, D42, J42, L10, L33, P23, P31

Suggested Citation

Estrin, Saul and Konings, Jozef and Zolkiewski, Zbigniew and Angelucci, Manuela, The Effect of Ownership and Competitive Pressure on Firm Performance in Transition Countries, Micro Evidence from Bulgaria, Romania and Poland (May 31, 2001). Available at SSRN: https://ssrn.com/abstract=283001

Saul Estrin

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

Houghton Street
London, WC2A 2AE
United Kingdom

Centre for Economic Policy Research (CEPR)

77 Bastwick Street
London, EC1V 3PZ
United Kingdom

IZA Institute of Labor Economics

P.O. Box 7240
Bonn, D-53072
Germany

Jozef Konings (Contact Author)

Centre for Economic Policy Research (CEPR)

77 Bastwick Street
London, EC1V 3PZ
United Kingdom

IZA Institute of Labor Economics

P.O. Box 7240
Bonn, D-53072
Germany

Catholic University of Leuven (KUL) - LICOS - Centrum voor Transitie-economie ( email )

Waaistraat 6 - box 3511
Leuven, 3000
Belgium
+32 16 326 589 (Phone)
+32 16 326 599 (Fax)

Zbigniew Zolkiewski

NOBE - Independent Center for Economic Studies ( email )

Jonshera 4/10
90303 Lodz
Poland
+48 22 608 33 25 (Phone)
+48 22 608 38 62 (Fax)

Central Statistical Office, Warsaw

Warsaw, 00-241
Poland

Manuela Angelucci

University of Michigan - Department of Economics ( email )

611 Tappan Street
Ann Arbor, MI 48109-1220
United States

Institute for the Study of Labor (IZA)

P.O. Box 7240
Bonn, D-53072
Germany

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