Working Paper: CEPR ID: DP2444
Authors: J. David Brown; John S. Earle
Abstract: The 'big-bang' liberalization of the inefficient Russian economy in 1992 provides a fruitful setting for analysing the impact of several dimensions of market competition and other factors on enterprise efficiency. We analyse 1992-1998 panel data on 14,961 enterprises covering 75 percent of industrial employment, emphasizing the varied sources, geographic scope, intensity, time path, and survival effects of competitive pressures. We find large, positive effects on TFP from competition in domestic product and local labour markets, and from imports and better transportation infrastructure, although the first effect appears only gradually. Non-state firms outperform state enterprises, even after correction for selection bias.
Keywords: competition; firm exit; foreign trade; monopsony; privatization; Russia; total factor productivity
JEL Codes: D24; D40; J42; L10; L33; P23; P31
Edges that are evidenced by causal inference methods are in orange, and the rest are in light blue.
| Cause | Effect |
|---|---|
| increased domestic product market competition (F61) | total factor productivity (TFP) (D24) |
| import competition (L13) | total factor productivity (TFP) (D24) |
| local labor market competition (J29) | firm efficiency (D22) |
| better transportation infrastructure (R42) | total factor productivity (TFP) (D24) |
| nonstate firms (L39) | firm performance (L25) |