Firms Facing New Institutions: Transactional Governance in Romania

42 Pages Posted: 11 Mar 2003

See all articles by Peter Murrell

Peter Murrell

University of Maryland - Department of Economics

Multiple version iconThere are 2 versions of this paper

Date Written: January 20, 2003

Abstract

How quickly do firms respond to new institutions? Romanian survey data permits investigation of this question, using variables summarizing firms' strategies on transactional governance. These variables are regressed on the factors that should determine efficient behavior according to standard agency and transaction-cost theories. The results suggest that transactional strategies do not currently reflect efficiency considerations. Instead, behavior reflects peculiarities of transition: history, ownership, and state-relations are more important in determining responses to new institutions. Firms use institutions but do not evidence efficient responses to them. Appropriate institutional reform deploys information on how firms adjust to institutions before the long-run.

Keywords: Institutions, transition, restructuring, legal systems, transactional governance, Romania

JEL Classification: P31, L14, P37, K12

Suggested Citation

Murrell, Peter, Firms Facing New Institutions: Transactional Governance in Romania (January 20, 2003). Available at SSRN: https://ssrn.com/abstract=373741 or http://dx.doi.org/10.2139/ssrn.373741

Peter Murrell (Contact Author)

University of Maryland - Department of Economics ( email )

College Park, MD 20742
United States
301-405-3476 (Phone)
301-405-3542 (Fax)

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