Interaction Among New Firm Formation, Privatization, and Business Environment in Transition Countries
Seoul Journal of Economics 30 (No. 2 2017): 159-178
20 Pages Posted: 1 Jun 2017
Date Written: May 30, 2017
The formation of new private firms can facilitate transition from socialism to a market economy. This study uses data from transition economies to investigate the effects of large-scale privatization and the barriers to the establishment of new firms. It finds that large-scale privatization positively affects the formation of new firm, but such effects disappear as the costs of start-up increase. These results imply that both privatization and favorable business environments are necessary for firm creation.
Keywords: New firms, Large-scale privatization, Start-up costs
JEL Classification: M13, P2
Suggested Citation: Suggested Citation