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Disorganization in the process of transition

Author

Listed:
  • Jozef Konings
  • Patrick Paul Walsh

Abstract

Most post‐communist economies are characterized by an initial collapse in aggregate output. Blanchard and Kremer (1997) and Roland and Verdier (1997) have recently modelled supply‐side distortions – disorganization in the links of production – that can lead to a short‐term output contraction after market liberalization and a recovery thereafter. This paper is the first to illustrate and test the effects of disorganization in the transition process by using a unique dataset of 300 Ukrainian firms. Our results show that for firms that existed under central planning, disorganization constrains employment and productivity growth during the transition process to a market economy. We also show that the effects of disorganization are greater the more out‐dated the capital stock inheritance from the planning system. In contrast, disorganization plays no role in the determination of employment and productivity growth in newly established private firms. JEL classification: P0, O0, D0.

Suggested Citation

  • Jozef Konings & Patrick Paul Walsh, 1999. "Disorganization in the process of transition," The Economics of Transition, The European Bank for Reconstruction and Development, vol. 7(1), pages 29-46, March.
    • Handle: RePEc:bla:etrans:v:7:y:1999:i:1:p:29-46
    DOI: 10.1111/1468-0351.00003
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    Citations

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    Cited by:

    1. Faggio, Giulia, 2007. "Job destruction, job creation and unemployment in transition countries: what can we learn?," LSE Research Online Documents on Economics 19716, London School of Economics and Political Science, LSE Library.
    2. Fardmanesh, Mohsen & Tan, Li, 2003. "Wage and price control policies in transition economies," Journal of Development Economics, Elsevier, vol. 70(1), pages 173-200, February.
    3. Patrick Paul Walsh & Peter McGoldrick, 2005. "Estimating Productivity Dynamics During Institutional Change: An Application To Chinese State Owned Enterprises 1980-1994," Trinity Economics Papers tep14, Trinity College Dublin, Department of Economics.
    4. Yueping Song & Xiao-Yuan Dong, 2013. "Gender and Occupational Mobility in Urban China during the Economic Transition," Research in Labor Economics, in: Labor Market Issues in China, pages 93-122, Emerald Group Publishing Limited.
    5. Dries, Liesbeth & Swinnen, Johan F. M., 2004. "Foreign Direct Investment, Vertical Integration, and Local Suppliers: Evidence from the Polish Dairy Sector," World Development, Elsevier, vol. 32(9), pages 1525-1544, September.
    6. Jozef Konings & Olga Kupets & Hartmut Lehmann, 2002. "Gross Job Flows in Ukraine: Size, Ownership and Trade Effects," William Davidson Institute Working Papers Series 521, William Davidson Institute at the University of Michigan.
    7. Marin, Dalia & Schnitzer, Monika, 2005. "Disorganization and financial collapse," European Economic Review, Elsevier, vol. 49(2), pages 387-408, February.
    8. World Bank, 2005. "The Dynamics of Vertical Coordination in Agrifood Chains in Eastern Europe and Central Asia : Implications for Policy and World Bank Operations," World Bank Publications - Reports 8806, The World Bank Group.
    9. Sergei Guriev & Barry W. Ickes, 2000. "Microeconomic Aspects of Economic Growth in Eastern Europe and the Former Soviet Union, 1950-2000," William Davidson Institute Working Papers Series 348, William Davidson Institute at the University of Michigan.
    10. repec:lic:licosd:15304 is not listed on IDEAS
    11. Johan F.M. Swinnen & Anneleen Vandeplas, 2010. "Market power and rents in global supply chains," Agricultural Economics, International Association of Agricultural Economists, vol. 41(s1), pages 109-120, November.
    12. Kalyuzhnova, Yelena & Vagliasindi, Maria, 2006. "Capacity utilization of the Kazakhstani firms and the Russian financial crisis: A panel data analysis," Economic Systems, Elsevier, vol. 30(3), pages 231-248, October.
    13. Repkine, Alexandre & Walsh, Patrick Paul, 1999. "Evidence of European Trade and Investment U-Shaping Industrial Output in Bulgaria, Hungary, Poland, and Romania," Journal of Comparative Economics, Elsevier, vol. 27(4), pages 730-752, December.
    14. Gorodnichenko, Yuriy & Grygorenko, Yegor, 2008. "Are oligarchs productive? Theory and evidence," Journal of Comparative Economics, Elsevier, vol. 36(1), pages 17-42, March.
    15. Dries, Liesbeth & Germenji, Etleva & Noev, Nivelin & Swinnen, Johan F.M., 2009. "Farmers, Vertical Coordination, and the Restructuring of Dairy Supply Chains in Central and Eastern Europe," World Development, Elsevier, vol. 37(11), pages 1742-1758, November.
    16. repec:lic:licosd:23309 is not listed on IDEAS
    17. McGoldrick, Peter & Walsh, P. Paul, 2007. "Successful Factor Market Competition Pre-Privatisation? China`s eclectic.com," Research Technical Papers 3/RT/07, Central Bank of Ireland.
    18. repec:tcd:wpaper:tep14 is not listed on IDEAS
    19. Warzynski, Frederic, 2003. "Managerial change, competition, and privatization in Ukraine," Journal of Comparative Economics, Elsevier, vol. 31(2), pages 297-314, June.
    20. M. A. Baqui Khalily & Abdul Khaleque, 2013. "Access to Credit and Productivity of Enterprises in Bangladesh: Is there Causality?," Working Papers 20, Institute of Microfinance (InM).
    21. Falkowski, Jan, 2014. "The economic effects of radical reorganisation of the agro-food supply chain: some evidence from Poland," 2014 International Congress, August 26-29, 2014, Ljubljana, Slovenia 182713, European Association of Agricultural Economists.
    22. repec:bla:etrans:v:9:y:2001:i:1:p:105-114 is not listed on IDEAS
    23. Gorodnichenko Yury & Grigorenko Yegor & Ostanin Dmytro, 2006. "Relative property rights in transition economies: Can the oligarchs be productive?," EERC Working Paper Series 06-04e, EERC Research Network, Russia and CIS.
    24. repec:bla:etrans:v:11:y:2003-06:i:2:p:321-356 is not listed on IDEAS
    25. Ma, Hong & Qiao, Xue & Xu, Yuan, 2015. "Job creation and job destruction in China during 1998–2007," Journal of Comparative Economics, Elsevier, vol. 43(4), pages 1085-1100.

    More about this item

    JEL classification:

    • P0 - Political Economy and Comparative Economic Systems - - General
    • O0 - Economic Development, Innovation, Technological Change, and Growth - - General
    • D0 - Microeconomics - - General

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