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The Impact of Labor Reallocation and Competitive Pressure on TFP Growth: Firm-level Evidence from Crisis and Transition Ridden Bulgaria

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  • Ralitza Dimova

Abstract

This paper uses the natural experiment of a macro-financial crisis and radical liberalization in Bulgaria to explore the impact of labor reallocation and competitive pressure on Total Factor Productivity (TFP) growth in the manufacturing sector. Our results indicate that labor reallocated from less efficient to more efficient firms in virtually all industries but the influence of other within industry characteristics on TFP growth was significantly higher. Furthermore, while increased competitive pressure had a positive impact on TFP growth among relative laggards in the respective industries, this impact was more than overwhelmed by the inability of industrial leaders to leapfrog their competitors.

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  • Ralitza Dimova, 2006. "The Impact of Labor Reallocation and Competitive Pressure on TFP Growth: Firm-level Evidence from Crisis and Transition Ridden Bulgaria," CEDI Discussion Paper Series 06-04, Centre for Economic Development and Institutions(CEDI), Brunel University.
    • Handle: RePEc:edb:cedidp:06-04
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    Cited by:

    1. Tyrowicz, Joanna & van der Velde, Lucas, 2018. "Labor reallocation and demographics," Journal of Comparative Economics, Elsevier, vol. 46(1), pages 381-412.
    2. Daniela Maggioni, 2013. "Productivity Dispersion and its Determinants: The Role of Import Penetration," Journal of Industry, Competition and Trade, Springer, vol. 13(4), pages 537-561, December.
    3. Joanna Tyrowicz & Lucas van der Velde, 2014. "Can We Really Explain Worker Flows in Transition Economies?," Working Papers 2014-28, Faculty of Economic Sciences, University of Warsaw.

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