Productive Efficiency during Transition: Evidence from Bulgarian Panel Data

Type of Work

Article

Date

9-1998

Journal Title

Journal of Comparative Economics

Journal ISSN

0147-5967

Journal Volume

26

Journal Issue

3

First Page

446

Last Page

464

DOI

10.1006/jcec.1998.1529

Abstract

New and unusually rich panel data for Bulgarian companies during late communism and early transition were used to investigate the determinants of productive efficiency. Compared to conventional production functions, stochastic frontier models were found to be the preferred specifications. Typically, enterprise performance was found to he unaffected by several factors, including the extent of exports, joint venture status labor management relations, and unionization. However, business efficiency was enhanced by incentive compensation arrangements. Compared to fading communism, the determinants of productive efficiency were found not to have changed much during early transition. Average firm efficiency was also investigated and found to be quite low--between 0.603 and 0.720. This dispersion has grown during early transition.

Notes

JEL Classification: P31, D24

Hamilton Areas of Study

Economics

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