Economic Reforms and Productivity-Enhancing Reallocation in the Post-Soviet Transition PDF Print E-mail

J. David Brown and John S. Earle

Economic Reforms and Productivity-Enhancing Reallocation in the Post-Soviet Transition

August 5, 2005

Abstract

How do economic reforms affect resource reallocation processes and their contributions to productivity growth? This paper studies the consequences of enterprise privatization and liberalization of product markets, labor markets, and imports in the former Soviet Republics of Russia and Ukraine. Analyzing interfirm reallocation of output, labor, capital, and an input index with annual industrial census data from 1985 to 2001, this study finds that Soviet Russia displayed low reallocation rates that bore little relationship to relative labor and multifactor productivity across firms. Since reforms began, resource flows have increased in both countries, and their contributions to aggregate productivity growth have become substantial both through increased flows from less productive to more productive continuing firms and through higher exits of less productive entities – i.e., through creative destruction. Among the policy-relevant factors that may explain firm-level variation, privatization is estimated to have positive effects on productivity-enhancing reallocation, but there is less evidence of such effects from domestic product market competition, labor market competition, or import penetration.

 

Contact Information

National Council for Eurasian and East European Research

DC Office
  • 1828 L Street NW Suite 1200
  • Washington, DC 20036
  • Tel: 202-572-9095
  • Tel: 202-572-9125 (alternate)
  • Fax: 866-937-9872
  • E-mail: info@nceeer.org

ac_logo_smallcarnegielogo_smallsd_logo_smallNEH

NCEEER

miffsuzzallopomak_children

National Council for Eurasian and East European Research (NCEEER) is a non-profit organization created in 1978 to develop and sustain long-term, high-quality programs for post-doctoral research on the social, political, economic, environmental, and historical development of Eurasia and Central and Eastern Europe.   More

Latest NCEEER Working Papers

2012_826-14g_Irvine

 

 

 

 

 

 

Doctors' and Parents' Perspectives on Communication Regarding HPV Vaccination in Bulgaria

Elitsa Dimitrova, Yulia Panayotova, Anna Alexandrova-Karamanova, and Irina Todorova

Contextual Constitution of Behavior: Introducing the HPV Vaccine in Eastern Europe

Irina Todorova and Adrian Baban

The Readers of Novyi Mir, 1948-1969: A Social Portrait

Denis Kozlov