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

See all articles by Youngho Kang

Youngho Kang

Soongsil University

Byung-Yeon Kim

Seoul National University

Jong-Kyu Lee

Korea Development Institute (KDI) - Department of North Korean Economy

Date Written: May 30, 2017

Abstract

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

Kang, Youngho and Kim, Byung-Yeon and Lee, Jong-Kyu, Interaction Among New Firm Formation, Privatization, and Business Environment in Transition Countries (May 30, 2017). Seoul Journal of Economics 30 (No. 2 2017): 159-178, Available at SSRN: https://ssrn.com/abstract=2977760

Youngho Kang

Soongsil University ( email )

511, Sangdo-dong, Dongjak-gu
Seoul
Korea, Republic of (South Korea)

Byung-Yeon Kim

Seoul National University ( email )

San 56-1, Silim-dong, Kwanak-ku
Seoul 151-742
Korea

Jong-Kyu Lee (Contact Author)

Korea Development Institute (KDI) - Department of North Korean Economy ( email )

15 (Bangok-dong, Korea Development Institute)
Giljae-gil, Sejong-si 339-007
United States

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