Firms Facing New Institutions: Transactional Governance in Romania

Posted: 9 Jun 2004

See all articles by Peter Murrell

Peter Murrell

University of Maryland - Department of Economics

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Abstract

How do firms respond to new institutions? This question is addressed by analyzing the determinants of firms' strategies on transactional governance, using data from a Romanian survey. Strategy variables are regressed on factors that should determine behavior according to agency and transaction-cost theories. The results suggest that strategies do not reflect the long-run efficiency considerations emphasized by theory. Behavior reflects peculiarities of transition; history, ownership, and state relations are more important in determining responses to institutions. Firms use institutions but not as predicted by theories emphasizing efficiency, suggesting that institutional reform must reflect both transitional responses and predicted long-run behavior.

JEL Classification: P31, L14, P37, K12

Suggested Citation

Murrell, Peter, Firms Facing New Institutions: Transactional Governance in Romania. Journal of Comparative Economics, Vol. 31, No. 4, December 2003. Available at SSRN: https://ssrn.com/abstract=555815

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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