Convergence in Institutions and Market Outcomes : Cross-country and Time-series Evidence from the Business Environment and Enterprise Performance Surveys in Transition Economies
This paper uses firm-level data from the Business Environment and Enterprise Performance Surveys to study the process of convergence of transition countries with developed market economies. The study focuses on competition and market structure, fin...
| Main Authors: | , , |
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| Format: | Policy Research Working Paper |
| Language: | English |
| Published: |
2012
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| Subjects: | |
| Online Access: | http://www-wds.worldbank.org/external/default/main?menuPK=64187510&pagePK=64193027&piPK=64187937&theSitePK=523679&menuPK=64187510&searchMenuPK=64187283&siteName=WDS&entityID=000158349_20090113083329 http://hdl.handle.net/10986/4017 |
| Summary: | This paper uses firm-level data from the
Business Environment and Enterprise Performance Surveys to
study the process of convergence of transition countries
with developed market economies. The study focuses on
competition and market structure, finance and the structure
of lending to firms, and how firms respond to the economic
environment by restructuring. The authors find substantial
evidence of convergence in a number of dimensions. The
pattern of growth at the country, sector, and firm levels
shows rapid growth of the new private sector and of the
micro and small-firm sectors, with the size distribution of
firms moving toward the pattern observed in the surveys of
developed market economies. In finance, increasing reliance
on retained earnings in transition countries reflects a
maturation of the sector as new firms come to rely less on
informal and family sources of finance. The authors find
evidence of an inverse-U pattern, with the peak of
restructuring activity taking place in 2002, the middle of
the period analyzed. Throughout, the regional patterns
suggest greater convergence in the transition countries that
joined the European Union in 2004 than in the other,
lower-income transition economies. |
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