Do Market Pressures Induce Economic Efficiency? The Case of Slovenian Manufacturing, 1994-2001

Using a unique longitudinal data set on all manufacturing firms in Slovenia from 1994 to 2001, this article analyzes how firm efficiency changed in response to changing competitive pressures associated with the transition to market. Results show that the period was one of atypically rapid growth of...

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Main Authors:	Orazem, Peter F., Vodopivec, Milan
Format:	Journal Article
Language:	EN
Published:	2012
Subjects:	Production Cost Capital, Total Factor, and Multifactor Productivity Capacity D240 Production, Pricing, and Market Structure Size Distribution of Firms L110 Industry Studies: Manufacturing: General L600
Online Access:	http://hdl.handle.net/10986/4823

id	okr-10986-4823
recordtype	oai_dc
spelling	okr-10986-48232021-04-23T14:02:19Z Do Market Pressures Induce Economic Efficiency? The Case of Slovenian Manufacturing, 1994-2001 Orazem, Peter F. Vodopivec, Milan Production Cost Capital, Total Factor, and Multifactor Productivity Capacity D240 Production, Pricing, and Market Structure Size Distribution of Firms L110 Industry Studies: Manufacturing: General L600 Using a unique longitudinal data set on all manufacturing firms in Slovenia from 1994 to 2001, this article analyzes how firm efficiency changed in response to changing competitive pressures associated with the transition to market. Results show that the period was one of atypically rapid growth of total factor productivity (TFP). The rise in firm efficiency occurs across almost all industries and firm types: large or small, state or private, domestic or foreign owned. Changes in firm ownership type have no direct impact on firm efficiency. However, increased market competition related to rising market share of private firms, new market entrants, foreign-owned firms, and international trade raises TFP across all firms in an industry, whether private or state owned. In addition, competitive pressures that sort out inefficient firms of all types and retain the most efficient, coupled with the entry of new private firms that are at least as efficient as surviving firms, prove to be the major source of TFP gains. Results strongly confirm that market competition fosters efficiency. 2012-03-30T07:29:55Z 2012-03-30T07:29:55Z 2009 Journal Article Southern Economic Journal 00384038 http://hdl.handle.net/10986/4823 EN http://creativecommons.org/licenses/by-nc-nd/3.0/igo World Bank Journal Article Slovenia
repository_type	Digital Repository
institution_category	Foreign Institution
institution	Digital Repositories
building	World Bank Open Knowledge Repository
collection	World Bank
language	EN
topic	Production Cost Capital, Total Factor, and Multifactor Productivity Capacity D240 Production, Pricing, and Market Structure Size Distribution of Firms L110 Industry Studies: Manufacturing: General L600
spellingShingle	Production Cost Capital, Total Factor, and Multifactor Productivity Capacity D240 Production, Pricing, and Market Structure Size Distribution of Firms L110 Industry Studies: Manufacturing: General L600 Orazem, Peter F. Vodopivec, Milan Do Market Pressures Induce Economic Efficiency? The Case of Slovenian Manufacturing, 1994-2001
geographic_facet	Slovenia
relation	http://creativecommons.org/licenses/by-nc-nd/3.0/igo
description	Using a unique longitudinal data set on all manufacturing firms in Slovenia from 1994 to 2001, this article analyzes how firm efficiency changed in response to changing competitive pressures associated with the transition to market. Results show that the period was one of atypically rapid growth of total factor productivity (TFP). The rise in firm efficiency occurs across almost all industries and firm types: large or small, state or private, domestic or foreign owned. Changes in firm ownership type have no direct impact on firm efficiency. However, increased market competition related to rising market share of private firms, new market entrants, foreign-owned firms, and international trade raises TFP across all firms in an industry, whether private or state owned. In addition, competitive pressures that sort out inefficient firms of all types and retain the most efficient, coupled with the entry of new private firms that are at least as efficient as surviving firms, prove to be the major source of TFP gains. Results strongly confirm that market competition fosters efficiency.
format	Journal Article
author	Orazem, Peter F. Vodopivec, Milan
author_facet	Orazem, Peter F. Vodopivec, Milan
author_sort	Orazem, Peter F.
title	Do Market Pressures Induce Economic Efficiency? The Case of Slovenian Manufacturing, 1994-2001
title_short	Do Market Pressures Induce Economic Efficiency? The Case of Slovenian Manufacturing, 1994-2001
title_full	Do Market Pressures Induce Economic Efficiency? The Case of Slovenian Manufacturing, 1994-2001
title_fullStr	Do Market Pressures Induce Economic Efficiency? The Case of Slovenian Manufacturing, 1994-2001
title_full_unstemmed	Do Market Pressures Induce Economic Efficiency? The Case of Slovenian Manufacturing, 1994-2001
title_sort	do market pressures induce economic efficiency? the case of slovenian manufacturing, 1994-2001
publishDate	2012
url	http://hdl.handle.net/10986/4823
_version_	1764392898693955584

Do Market Pressures Induce Economic Efficiency? The Case of Slovenian Manufacturing, 1994-2001

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