The Effects of Direct Foreign Investment on Domestic Firms: Evidence from Firm Level Panel Data in Emerging Economies By: Jozef Konings Working Paper Number 344 October 2000
William Davidson Institute Working Paper 344
The Effects of Direct Foreign Investment on Domestic Firms: Evidence from Firm Level Panel Data in Emerging Economies By Jozef Konings LICOS, Centre for Transition Economics Economics Department Catholic University of Leuven De Beriotstraat 34 3000 Leuven Belgium
Other affiliations: CEPR, London; Dartmouth College, USA Email:
[email protected]
August 2000
Acknowledgements: This paper is part of a project on DFI in Central and Eastern Europe, funded by the Thyssen foundation. I appreciate comments from Filip Abraham, Lode Berlage, Hans Degryse, Nina Pavnic, Koen Schoors, Hylke Vandenbussche and Reinhilde Veugelers. This paper benefited from seminars at the KULeuven, the University of Gent, the University of Antwerp (Ufsia) and the IMF. I thank Giulia Faggio and Frederic Warzynski for assistance.
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Non-Technical Summary The collapse of communism in Central and Eastern Europe and the emergence of a market economy has led to a large inflow of direct foreign investment (DFI) in the region during the last decade and in particular since the mid 90’s. Given the enormous increase in foreign investment, these countries provide an ideal natural experiment for measuring the impact of incoming foreign investment on performance. In particular, this paper uses firm level panel data to investigate empirically the effects of DFI on the productivity performance of domestic firms in three emerging economies of Central and Eastern Europe: Bulgaria, Romania and Poland. To this end a unique data set is used with detailed information on foreign ownership at the firm level. Two main questions are addressed in the present paper: (1) do foreign firms perform better than their domestic counterparts? (2) do foreign firms generate spillovers to domestic firms? There are various reasons why many policy makers believe DFI is beneficial to their country. A first reason is the need for strategic restructuring in firms in the emerging countries. Most firms in the emerging economies of the former Soviet block were characterised by obsolete machinery and outdated production methods. To compete in a market environment, firms had to improve their efficiency by engaging in strategic restructuring, i.e. updating the equipment and production process. Foreign firms have the technological know-how and finance necessary to update the equipment and bring about such strategic restructuring. Foreign participation in domestic firms has the additional benefit that it can impose an efficient corporate governance in privatized firms, often privatized to insider workers/managers, who might block restructuring. A second important reason why foreign investors are invited to emerging countries rests on the believe that they generate positive
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externalities to the domestic firms through a transfer of know-how and technology. Such spillovers can occur through various channels: the introduction of new products and production processes by foreign firms may benefit domestic firms through the accelerated diffusion of new technology. This could occur through labour turnover or through imitation or other channels. One other channel works through the equilibrating mechanism in the market when liberalization, here the opening up of Central and Eastern Europe to the rest of the world, is implemented. The positive externalities generated by foreign investors, however, may vanish if the increased competition from foreign firms leads to a reduction in the production of the domestic firm, which may lead to an increase in the average costs of production. In this case a negative competition effect may dominate a positive technological spillover effect. In this paper, the net effect is studied. Only in Poland, I find that foreign firms perform better than firms without foreign participation. In Bulgaria and Romania, no robust evidence is found of a positive foreign ownership effect. This may be due to the fact that it takes time for firms to restructure and that the effects of restructuring on productivity performance only appear after a few years. Since Bulgaria and Romania are less advanced in the transition process compared to Poland this may be a plausible explanation. Moreover, for all three countries studied here, I find no evidence of positive spillovers to domestic firms on average. In contrast, on average there are negative spillovers to domestic firms in Bulgaria and Romania, while there are no spillovers to domestic firms in Poland. This suggests a negative competition effect that dominates a positive technology effect.
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Abstract This paper uses firm level panel data to investigate empirically the effects of direct foreign investment (DFI) on the productivity performance of domestic firms in three emerging economies of Central and Eastern Europe, Bulgaria, Romania and Poland. To this end a unique firm level panel data set is used with detailed information on foreign ownership at the firm level. Two main questions are addressed in the present paper: (1) do foreign firms perform better than their domestic counterparts? (2) do foreign firms generate spillovers to domestic firms? The estimation technique in this paper takes potential endogeneity of ownership, spillovers and other factors into account by estimating a fixed effects model using instrumental variables in the general methods of moment technique for panel data. Only in Poland, I find that foreign firms perform better than firms without foreign participation. Moreover, for all three countries studied here, I find no evidence of positive spillovers to domestic firms on average. In contrast, on average there are negative spillovers to domestic firms in Bulgaria and Romania, while there are no spillovers to domestic firms in Poland. This suggests a negative competition effect that dominates a positive technology effect
JEL classification: D24, F14, O52, P31 Keywords: Foreign Investment, Spillovers, Emerging countries, Panel data
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I. Introduction
This paper uses firm level panel data to investigate empirically the effects of direct foreign investment (DFI) on the productivity performance of domestic firms in three emerging economies of Central and Eastern Europe, Bulgaria, Romania and Poland. The collapse of communism in Central and Eastern Europe and the emergence of a market economy has led to a large inflow of DFI in the region during the last decade and in particular since the mid 90’s. Figure 1 shows the evolution of DFI since 1991 for the three countries that I study in this paper, where the level of DFI is normalized to 1 in 1991. By 1998 there was almost 10 fold increase in DFI in Bulgaria compared to 1991, for Romania and Poland there was even a 50 and 60 fold increase in DFI by 1998. DFI Bulgaria DFI Romania
DFI Poland
60 50 40 30 20 10 0 1990
1992
1994 year
1996
1998
evolution of direct foreign investment in B, R and P Figure 1 (source: author’s calculations based on EBRD (2000))
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Policy makers in the emerging economies were faced with a collapsing state sector and a slowly growing private sector. With financial markets and commercial banking virtually absent, they encouraged foreign investors to take part in the privatization process or to invest in their countries. Given the enormous increase in foreign investment in these countries as illustrated in figure 1, these countries provide an ideal natural experiment for measuring the impact of incoming foreign investment on performance. There are various reasons why many policy makers believe DFI is beneficial to their country. A first reason is the need for strategic restructuring in firms in the emerging countries1. Most firms in the emerging economies of the former Soviet block were characterised by obsolete machinery and outdated production methods. To compete in a market environment, firms had to improve their efficiency by engaging in strategic restructuring, i.e. updating the equipment and production process (e.g. Irina Grossfeld and Gérard Roland, 1996). Foreign firms have the technological know-how and finance necessary to update the equipment and bring about such strategic restructuring. Foreign participation in domestic firms has the additional benefit that it can impose an efficient corporate governance in privatized firms, often privatized to insider workers/managers, who might block restructuring (Olivier Blanchard, 1997, pp.77-88). Klaus Wallner (1998) shows theoretically that especially in the emerging countries, characterized by soft budget constraints, foreign investment is welcomed to achieve such strategic restructuring as the presence of foreign investors gives governments incentives to reduce subsidies to firms because otherwise a part of the
1
Strategic restructuring refers to improving the long run viability and efficiency of a firm.
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subsidy may disappear in ‘foreign pockets’. Hence, the hardening of budget constraints increases effort by managers to restructure more. A second important reason why foreign investors are invited to emerging countries rests on the believe that they generate positive externalities to the domestic firms through a transfer of know-how and technology. Such spillovers can occur through various channels. David J. Teece (1977) argues that the introduction of new products and production processes by foreign firms may benefit domestic firms through the accelerated diffusion of new technology. This could occur through labour turnover or through imitation or other channels. One other channel works through the equilibrating mechanism in the market when liberalization, here the opening up of Central and Eastern Europe to the rest of the world, is implemented. A number of recent theoretical papers show that the degree to which domestic firms may benefit from such spillovers depends on the “absorptive capacity” of domestic firms. Franseca Sanna-Randacio (1999) and D. Leahy and Peter Neary (1999) show that DFI always leads to an increase in the productivity of the investing firm, however, DFI increases the host country’s productivity only if the degree of the technological spillover is high enough. The latter is more likely achieved in sectors characterized by intensive R&D or by firms which have a sufficient amount of knowledge to start with. This has been suggested in earlier empirical work. Ari Kokko (1994) and Borensztein, De Gregorio and Lee (1998) give evidence which suggests that positive DFI spillovers to local firms are only generated if the technology gap between the foreign firm and the domestic one is not too large and if there exists a minimum threshold of human capital in the host country.
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The technological spillovers thus lead to positive effects on domestic firms, however, there may exist a competition effect which works in the opposite direction. Foreign entry disturbs the existing market equilibrium and could force domestic firms to produce less output which pushes them up their average cost curves, at least if average cost curves are downward sloping, which would be the case if production involves a substantial fixed cost. This argument has been developed by Brian J. Aitken and Ann E. Harrison (1999). Which effect dominates depends on the stength of the technological spillover effect (and the absorptive capacity of firms) versus the competition effect. In this paper I analyse a number of questions: First, I test whether foreign owned subsidiaries in transition economies perform better than their domestically owned counterparts. Second, I test whether there exist ‘spillovers’ to domestic firms. I will look at the ‘net spillover’ effect, i.e. the sum of the technological spillover and the competition effect. In addition, I will make a distinction between sectoral and regional spillovers. I also test whether foreign firms benefit from the presence of other foreign firms in their sector or region. I use a unique panel data set of over 5000 firms in Bulgaria, Romania and Poland for the years 1993-972. Together these countries cover more than 70 million people and hence these economies are an important part of the Central and Eastern European Economies. Bulgaria and Romania are lagging behind Poland in the transition towards a market economy. While all three countries have experienced a substantial collapse in output at the start of transition, only Poland has reached GDP levels comparable to the pre-transition years and has positive growth rates. Both Bulgaria and Romania experienced a short period of positive growth in the mid 90’s,
2
except for Romania data run from 1994 onwards.
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however, output has collapsed again in Bulgaria since 1995 and in Romania since 1997. Because I use panel data I am able to track the same firm over time and hence I am able to control for unobserved firm level fixed effects, like for example the quality of the firm. Hence, as in Aitken and Harrison (1999) I am able to control for the potential endogeneity of foreign ownership and spillovers . Moreover, I will use the general methods of moments technique to estimate panel data as introduced by Arellano and Bond (1991) which allows me to construct instruments for potentially endogenous explanatory variables. This may be important if productivity shocks affect the levels of the input variables in a production function or if they affect spillovers. In that case fixed effects alone cannot properly control for the endogeneity. Furthermore, this technique allows me to estimate dynamic equations in a consistent way. The next section describes the data and econometric approach, section III gives the results and section IV is a concluding one.
II.
Data and Econometric Approach
Data The data set that is used provides information on 2321 firms in Bulgaria between 1993-97, 3844 firms in Romania between 1994-87 and 262 firms in Poland over the period 1993-1997. Due to a lot of missing observations on some of the input factors needed in the estimation, the total available number of firms for the estimation in Poland is much lower than in Bulgaria and Romania. The data are unbalanced panel data, however, attrition is likely to be random due to imperfect reporting, rather
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than exit of firms. The data consists of the company accounts of all incorporated firms in both the manufacturing and the non-manufacturing sectors satisfying at least one of the following criteria: number of employees greater than 100, total assets and operating revenues exceeding 16 million and 8 million USD, respectively. They are retrieved from annual company accounts published by the Creditreform Bulgaria OOD and by the Romanian Chamber of Commerce and Industry3. Foreign firms are defined as firms where a positive fraction of the shares is owned by a foreign investor in 1997. In the sample, around 10% of the firms have a foreign investor in 1997. For those firms with a foreign partner, the average fraction of shares held by foreign investors is 61%, 59% and 73% for Bulgaria, Romania and Poland respectively. Thus if a domestic firm has a foreign investor, on average, the foreign investor has a majority stake.
Econometric Approach and Measurement Issues
I follow Brian Aitken and Ann Harrison (1999) and estimate a log-linear production function at the firm level to test whether (1) foreign firms perform better than domestic ones, (2) there exist spillovers from DFI to local production. In particular, the following specification is the starting point of my analysis:
yit = αi + α 1nit + α 2kit + α 3mit + α 4ηt + α 5 DFIi + α 6 DFIiXTi + α 7 Spilljt + εit
(1)
3
Data are available on the Amadeus CD-ROM (Dec. 1998), a Pan European financial database, provided by Bureau van Dijk Electronic Publishing SA.
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where subscript i stands for firm i, subscript t for year t, y is log output, n is the log employment, k is the log of capital and m is the log of material inputs. Output is measured as sales at the firm level deflated by an aggregate price index. Sector level price indices were not available on a consistent basis for the countries studied here, so an aggregate producer price index was used for Romania and Poland, an aggregate consumer price index for Bulgaria as there was no reliable producer price index available for Bulgaria. These price indices were taken from the EBRD annual transition report (EBRD, 2000). The capital stock is proxied by the book value of tangible fixed assets in the firm, deflated by an aggregate price index. Finally, material inputs are proxied by material costs have also been deflated by an aggregate price index. To capture possible common aggregate shocks in production, like technological progress or some other unobserved time varying factors I include time effects, η. The fraction of shares held by a foreign investor is denoted by DFI. It can be noted that this variable has no time subscript, t, which is due to the fact that we only observe ownership in the year 1997. I also interact foreign ownership with the time trend to capture the fact that the effect of foreign ownership might affect both the level and the growth in productivity. This might be the case if it takes some time for foreign know-how to spillover to the local firm. Finally, Spill measures the sector level spillovers that arise from foreign investors. I proxy it by the share of output accounted for by foreign firms in total output at the 2-digit NACE sector level4. I will also report results in which both sectoral and regional spillovers are taken into account. The latter are measured as the fraction of output produced by foreign firms in total output of a particular region. Finally, ε, is a white noise error term.
4
NACE is the standard European sector classification, which is comparable to the SIC classification.
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Table 1 provides summary statistics on the variables that were used in the regression analysis. It can be noted that on average real sales are collapsing in Bulgaria which is consistent with the macro economic decline in GDP since 1995. In contrast, average real sales in Romania are growing rapidly, which is consistent with the fast growth rates in GDP noted since the mid 90’s (until 1997, after which output collapsed again). In Poland average real sales are growing at a more modest rate, but the initial ‘catch up’ took place earlier since transition started earlier in Poland. In absolute terms, the average growth in employment is always lower than the average growth in sales, which confirms the observed aggregate stylized fact that the adjustment in employment is much slower than the adjustment in output. From the summary statistics it can also be noted that the average spillover effect is around 10%, however this may vary substantially between sectors. In equation (1), there is an unobservable fixed effect, αi , which captures firm specific heterogeneity. Such an unobservable fixed effect is potentially correlated with the other explanatory variables. If it is not controlled for in the estimation, then inconsistent estimates due to an omitted variable bias result. One way of controlling for these fixed effects is by first differencing equation (1). At the same time, it is a way to control for potential endogeneity of foreign ownership, i.e. foreign investors might only acquire shares in the better firms. If I categorise firms in ‘good’ versus ‘bad’ firms then the unobserved fixed effect captures this and hence it is possible to avoid an endogeneity bias. First differencing equation (1) yields
∆yit = α 1∆nit + α 2 ∆kit + α 3∆mit + α 4∆ηt + α 6 DFIi + α 7 ∆spilljt + ∆εit
(2)
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The above modelling strategy allows me to test whether foreign firms perform better and whether spillovers are present. However, equation (2) does not allow me to test whether foreign firms benefit in a different way from spillovers than domestic firms. It may be possible that foreign firms benefit from other foreign firms in their sector, while domestic firms do not as in Aitken and Harrison (1999). For this reason I will include an interaction term in equation (2), where I interact foreign ownership with spillovers.
There is, however, a further econometric concern. An estimation by OLS of equation (2) may still lead to inconsistent estimates. This would be the case if productivity shocks have an effect on the input factors employed in the firm. Alternatively, productivity shocks may have an effect on spillovers, which would lead to an endogeneity of the spillovers. Furthermore, equation (2) is a static equation, allowing for some dynamic adjustment in output (in case of the presence of adjustment costs) would imply that equation (2) needs to be estimated with a lagged dependent variable which leads to further endogeneity problems. To avoid inconsistent estimates I therefore estimate equation (2) using the General Methods of Moments technique (GMM) with Instrumental Variables as developed by Arellano and Bond (1991) for estimating dynamic panel data. The advantage of this method over other commonly used panel data estimation techniques lies in its efficient use of the number of instruments generated for the endogenous explanatory variables. For instance, in equation (2), valid instruments for the differenced employment in the year 97 is the level of employment in the year 95 since this is not correlated with the differenced error term in 1997. Table 2 shows in a
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systematic way how the number of instruments increases as the panel progresses. In 1995 a valid instrument for a first differenced endogenous explanatory variable is its level in 1993, in 1996 valid instruments for the same variable includes its level in 1993 and its level in 1994 and so on. So as the panel progresses an increasing number of instruments becomes available which increases the efficiency of the estimation. In order to test the validity of instruments a Sargan test of instrument validity is computed and is asymptotically χ2 distributed. In addition, since the equation is estimated in first differenced form, the equation will show first-order serial correlation. However, what matters is the absence of second order serial correlation if the error term in the levels equation (1) is white noise. Therefore a test of second order serial correlation is reported and is asymptotically N(0,1) distributed.
III.
Results
Tables 3, 4 and 5 show the results for Bulgaria, Romania and Poland respectively. I show both OLS estimates and GMM IV estimates for equation (2). Since the equation is estimated in first-differences I also control for unobserved fixed effects. Starting with Bulgaria, the OLS estimates in column (1) of table 3 show no statistically significant effect of foreign ownership on performance. This may come across as a surprising result, however, in the context of transition economies it has been shown that privatised firms do not perform better than state owned enterprises, because it may take time before restructuring feeds through on firm performance (e.g. Konings, 1997; Faggio and Konings, 1999). There is however a statistically significant negative spillover effect of foreign firms on domestic ones, which suggests
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that a competition effect is dominating a technological spillover effect. The interaction term, foreign X spillover, suggests that foreign firms benefit from the presence of other foreign firms in the sector. However, this equation does not take into account the potential endogeneity of spillovers and of the other input factors. In the second column I therefore instrument all the input factors as well as the spillover effect using the moment restrictions suggested by the GMM technique (Arellano and Bond, 1991). A number of interesting results emerge. First, there still exist negative spillovers from DFI to domestic firms. The coefficient that is estimated with spillovers is equal to –0.67. Thus, a sector that has an increase in spillovers from 0 to 10% would experience a decline in total factor productivity of 6.7% on average. This suggests that the competition effect is dominating, which means that domestic firms, due to the increased competition from foreign firms in their sector, are pushed up their average cost curves due to a reduction in output they can produce. This would hold in case domestic firms have a declining average cost curve, i.e. in the presence of increasing returns to scale. Based on the estimates of the coefficients of the input factors, this hypothesis seems to be plausible. The sum of the coefficients of the input factors is larger than 1 which suggests increasing returns to scale in production or a declining average cost curve. Note, also that the coefficient on capital is low and statistically not significant at conventional levels. In the context of transition economies this is not surprising as most firms are characterised by outdated equipment and a lack of investment in new equipment, which decreases the marginal productivity of capital. A second result, which is the same as in the OLS estimation, is that foreign firms do not outperform domestic ones. Finally, the interaction effect between foreign ownership and spillovers is no longer statistically significant, albeit still positive.
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These IV results suggest that endogeneity may have been important in driving some of the results in the OLS regression. The Sargan test and the second order serial correlation test in collumn (2) all indicate that the model is correctly specified. The fact that there is no second order serial correlation suggests that there is no further dynamics to be specified in the model. The third column tests whether regional spillovers may matter. As argued by Aitken and Harrison (1999) there may be reasons to expect that any benefits to domestic firms from foreign ivestment would be received first by their neighbors before they diffuse to other domestic firms. One mechanism through which this may occur is through job mobility. Workers who worked with a multinational that leave the firm to work in a domestic one are more likely to move to another firm within the same region. Job reallocation in transition countries (and elsewhere) occurs primarily within regions rather than across regions (e.g. Faggio and Konings, 1999). I measure regional spillovers as the fraction of output produced by foreign firms in a given region in the total output produced by a given region. The results in column (3), however, show no statistically significant effect of regional spillovers to domestic firms in Bulgaria. Since Bulgaria is a small open economy regional effects are presumably less important in terms of competition, rather the entire Bulgarian market is more likely to be the appropriate market to consider. The results for Romania are reported in table 4 and are very similar to the results for Bulgaria, except that there is some hidden dynamics which needs to be taken into account. In column (1) the OLS results suggest that foreign firms outperform domestic ones, that domestic firms experience positive spillovers and that foreign firms do not benefit from other foreign firms in their sector that much as domestic ones. However, the second order serial correlation test suggests that the
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model is not correctly specified in terms of the dynamics. In addition, there may also be an endogeneity problem related to some of the explanatory variables. In column (2) of table 4 I therefore report the results using instruments for the input factors and for the spillovers. The results of column (2) show no statistically significant effects of spillovers and foreign ownership. However, again the diagnostics suggest that the model is misspecified, i.e. the Sargan test of instrument validity and the second order serial correlation test reject the model specification. Column (3) therefore estimates a dynamic model, including the lagged dependent variable as one of the regressors. Since the model is estimated in first differences, the lagged dependent variable is also endogenous and therefore needs to be instrumented too, using all available moment restrictions from t-2 backwards. In column (3) the Sargan test accepts the model specification, the second order serial correlation test could no longer be computed since one time observation is lost due to the lagged dependent variable and the fact that the data for Romania only go from 1994 onwards, rather than 1993. However, since the lagged dependent variable is statistically significant, it is likely that this controls for the initial problem of second order serial correlation. The results indicate that spillovers from foreign firms to domestic ones are negative. The results in column (3) suggest that once properly controlled for the dynamics in the model, again the same negative spillover effects show up. The interaction effect between foreign firms and spillovers is no longer statistically significant, just like foreign ownership in itself is no longer statistically significant. This is consistent with the empirical literature that has shown that privatisation did not lead to better firm performance and that it may take some time before firms start to engage in restructuring.
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Finally, in column (4) I test for the presence of regional spillovers. As in Bulgaria, I find no statistically significant effect of regional spillovers on domestic firms. Table 5 shows the results for Poland. Since I lost a lot of observations in the estimation due to missing data on material costs, the Polish sample is much smaller than the one used for Bulgaria and Romania, so the results for Poland need to be read with caution. The first column gives the OLS results. I find a statistically significant effect of foreign ownership on firm productivity performance. This contrasts with Bulgaria and Romania where I found no effect of foreign ownership. In the case of Poland, however, it may make sense that foreign firms outperform domestic ones since Poland is in a more advanced stage of development towards a market economy. If it takes time for firms to restructure then one may expect that in less developed countries, such as Bulgaria and Romania, foreign firms do not outperform domestic ones, while in the more advanced ones, such as Poland, the restructuring effects have come through which is reflected in the positive effect of foreign ownership. In column (1) I find no statistically significant effect of spillovers. In column (2) I report the GMM IV estimates. The same results hold as in the OLS case, i.e. foreign firms outperform domestic ones or to put it differently, a firm that would change its ownership structure from 0% foreign participation to 100% foreign participation, total factor productivity would increase by approximately 20%. This result confirms the hypothesis that foreign firms or joint ventures have some superior knowledge and/or technology which allows them to be more efficient than their domestic counterparts. It is also consistent with the idea that foreign firms induce restructuring at the firm level which leads to higher productivity (Wallner, 1998).
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Again I find no statistically significant effect of spillovers. This may be due to the fact that the “technological” positive externality and the negative competition effect cancel eachother out, or, it may be due to the fact that there are no increasing returns to scale which would imply that there is no declining average cost curve. The latter makes sense, based on the estimates of the coefficients of the input factors. Rather decreasing returns to scale seem to hold on average, with the only statistically significant input factor being material costs. This is plausible as most firms in transition countries are still characterised by over-manning levels and an outdated capital stock. Moreover, since transition has started earlier in Poland than in Romania and Bulgaria, the initial increase in competitive pressure at the start of transition was experienced at an earlier stage, such that the competition effect in the case of Poland is likely to be much lower than in the case of Bulgaria and Romania. Finally, in column (3) I also test for the presence of regional spillovers. However, the only significant effect I find is the material costs of production. Also foreign ownership is no longer statistically significant at conventional levels. This is most likely due to multicollinearity of the data, given that only 262 observations are used in the estimation. For this reason I estimated the equation again, but leaving out the interaction terms between foreign ownership and spillovers. In column (4) the results are reported and show that as before foreign firms do better than domestic ones. In addition, I find evidence of negative regional spillovers, albeit only significant at the 10% level, but still no evidence of spillovers at the sectoral level.
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IV. Conclusion
This paper studied the effects of direct foreign investment on the performance of firms in three emerging market economies, Bulgaria, Romania and Poland. Two main questions were addressed. First, do foreign firms perform better than their domestic competitors and second, does foreign investment generate ‘spillovers’ to local firms? I find evidence that foreign firms do not perform better than domestic ones, except in Poland, the more advanced transition economy. This suggests that it may take time for ownership effects to have an effect on performance, due to lags in restructuring. In addition, I find no evidence of positive spillovers, but rather negative or no spillovers of foreign investment to domestic firms. This is rationalised through a competition effect that dominates a technological spillover effect in Bulgaria and Romania, which would hold under the assumption of increasing returns to scale (declining average cost curves). The competition effect may dominate the technology effect if the technology gap is too large, which would be the case in less advanced countries such as Bulgaria and Romania. The results in this paper suggest that in the early stages of transition, the stages Bulgaria and Romania are in, the increased competition from DFI dominates technological spillovers to domestic firms. It suggests that inefficient firms will loose market share due to foreign competition, which in the long run should increase the overall efficiency of an economy. In the latter stages, when domestic firms have engaged in substantial restructuring and market competition has been established, the dominating competition effect seems to vanish. Whether in the longer run
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technological spillover effects start dominating, leading to positive spillovers is a topic for future research when more years of data will become available.
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References Aitken, Brian, J. and Harrison, Ann E. (1999). “Do Domestic Firms Benefit from Direct Foreign Investment? Evidence from Venezuela”, American Economic Review, Vol. 89, No 3, pp. 605-618. Arellano, M. and Bond, S. (1991). “Some Tests of Specifications of Panel Data: Monte Carlo Evidence and an Application to Employment Equations”, Review of Economic Studies, Vol. 58, pp. 277-94. Blanchard, Olivier (1997). The Economics of Post-Communist Transition, Clarendon Lectures in Economics, Oxford University Press. Blomström, Magnus and Sjöholm, Fredrik (1999). “Technology Transfer and Spillovers: Does Local Participation with Multinationals Matter?”, European Economic Review, Vol. 43, pp.915-923. Borensztein, E., De Gregorio, J. and Lee, J-W. (1998). “How Does Foreign Direct Investment Affect Economic Growth?”, Journal of International Economics, Vol. 45, pp. 115-135. Cassiman, Bruno and Veugelers, Reinhilde. (1999). “Spillovers and R&D Cooperation: Some Empirical Evidence”, mimeo KULeuven. Davis, Steve and Haltiwanger, John (1992). “Gross Job Creation, Gross Job Destruction and Employment Reallocation”, Quarterly Journal of Economics, Vol. CVII, pp. 819-863. Djankov, S. and Hoekman, B. (1998). “Avenues of Technology Transfer: Foreign Investment and Productivity Change in the Czech Republic”, CEPR discussion paper 1883. EBRD (2000). EBRD Transition Report, EBRD, London. Faggio, G. and Konings, J. (1999). “Gross Job Flows and Firm Growth in Transition Countries: Evidence using Firm Level Data on Five countries”, CEPR Discussion Paper, 2261. Grossfeld, Irina and Roland, Gérard. (1996). “Defensive and Strategic Restructuring in Central European Enterprises”, Centre for Economic Policy Research DP 1135. Kokko, Ari (1994). “Technology, Market Characteristics and Spillovers”, Journal of Development Economics, Vol. 43, pp. 279-293. Konings, Jozef (1997). “Firm Growth and Ownership”, Economics Letters, Vol. 55, pp. 413-18. Leahy, D. and Neary, P. (1999). “Absorptive Capacity, R&D spillovers, and Public Policy”, mimeo University College Dublin.
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Levinsohn, James (1999). “Employment Responses to International Liberalization in Chile”, Journal of International Economics, Vol. 47, pp. 321-344. Repkine, Alexandre and Walsh, Patrick P. (1999). “Evidence of European Trade and Investment U-Shaping Industrial Output in Bulgaria, Hungary, Poland and Romania”, Journal of Comparative Economics, December. Sanna-Randaccio, Fransesca (1999). “The Impact of Foreign Direct Investment on Home and Host Countries with Endogenous R&D”, mimeo Universita’ di Roma “La Sapienza”. Teece, David, J. (1977). “Technology Transfer by Multinational Firms: The Resource Cost of Transferring Technological Know-How”, Economic Journal, June, Vol 87 (346), pp.242-61. Wallner, Klaus (1998) “FDI, Soft Budget Constraints and Expropriation Incentives”, Mimeo SITE, Stockholm School of Economics.
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Table 1: Summary Statistics (means of the sample)
sectoral spillover regional spillover sales growth employment growth capital growth material growth
Bulgaria 0.09 0.10 -0.27 -0.039 -0.287 -0.25
Romania 0.13 0.11 0.47 -0.042 0.10 0.50
Poland 0.15 0.12 0.07 -0.01 0.03 0.03
Table 2 : Available instruments in GMM technique Endogenous explanatory variable Available instruments xi 95, xi 94, xi 93 ∆xi 97 1997 xi 94, xi 93 ∆xi 96 1996 xi 93 ∆xi 95 1995 Note: x refers to any of the explanatory variables that is treated as endogenous.
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independent variables: n k m DFI sector spill DFI x sector spill Region spill DFI x region spill
Table 3: Results for Bulgaria Dependent variable: y OLS IV IV 0.127* (0.038) 0.047* (0.011) 0.626* (0.023) -0.03 (0.026) -0.206* (0.091) 3.528* (1.473) -
0.538* (0.175) 0.012 (0.038) 0.720* (0.072) -0.112 (0.113) -0.670* (0.360) 6.199 (12.184) -
-
-
0.560* (0.187) 0.018 (0.039) 0.738* (0.075) -0.176 (0.136) -0.678* (0.371) 5.225 (12.40) -0.175 (0.206) 5.061 (5.825) 30.1 (df=29) -0.025 4,662
Sargan Test 31.18 (df=31) SOC test 0.248 -0.103 number of 4,662 4,662 observations Notes: (i) all equations include time dummies, (ii) heteroscedastic consistent standard errors in brackets, (iii) * denotes significant at the 5% level, ** at the 10% level, (iv) instruments include some or all available moment restrictions of the endogenous explanatory variables as well as region dummies.
26
William Davidson Institute Working Paper 344
independent variables: yt-1
Table 4: Results for Romania Dependent variable: y OLS IV IV -
-
0.134* (0.017) 0.081* (0.011) 0.604* (0.017) 0.01* (0.002) 0.201* (0.083) -32.52* (12.1) -
0.245* (0.073) 0.04** (0.026) 0.660* (0.036) 0.04 (0.003) 0.436 (0.459) -8.937 (12.07) -
0.138* (0.034) 0.106* (0.06) 0.043* (0.02) 0.411* (0.04) 0.001 (0.02) -1.101* (0.528) -21.06 (66.92) -
DFI x region spill
-
-
-
Sargan Test SOC test number of observations Notes: as in table 3
-3.708 10,955
15.14 (df=6) -3.872 10,955
60.3 (df=45) 7,111
n k m DFI sector spill DFI x sector spill Region spill
IV 0.144* (0.035) 0.094** (0.063) 0.043* (0.02) 0.421* (0.044) 0.128 (0.17) -0.934** (0.579) -14.8 (72.5) 0.063 (0.128) -2.93 (4.18) 59.27 (df=43) 7,111
27
William Davidson Institute Working Paper 344
independent variables: n
Table 5: Results for Poland Dependent variable: y OLS IV 0.01 (0.14) 0.017 (0.03) 0.429* (0.081) 0.178* (0.08) -0.253 (0.324) 1.14 (2.162) -
0.022 (0.121) 0.017 (0.087) 0.487* (0.129) 0.215* (0.097) 0.174 (0.790) 3.175 (4.835) -
DFI x region spill
-
-
Sargan Test SOC test number of observations Notes: as in table 3
0.171 340
12.77 (df=16) 0.536 340
k m DFI sector spill DFI x sector spill Region spill
IV
IV
0.062 (0.108) 0.059 (0.083) 0.613* (0.094) 0.13 (0.11) -0.191 (0.689) -1.84 (8.34) -0.377 (0.327) 1.77 (10.84) 19.03 (df=20) 0.07 340
0.03 (0.11) 0.06 (0.067) 0.527* (0.079) 0.145* (0.062) -0.172 (0.721) -0.48** (0.301) 16.92 (df=21) 0.391 340
28
THE WILLIAM DAVIDSON INSTITUTE AT THE UNIVERSITY OF MICHIGAN BUSINESS SCHOOL
DAVIDSON INSTITUTE WORKING PAPER SERIES CURRENT AS OF 11/06/00 Publication No. 344 The Effects of Direct Foreign Investment on Domestic Firms No. 343 On the Identification of Relative Wage Rigidity Dynamics No. 342 The Determinants of Foreign Direct Investment in Transition Economies No. 341 The Global Spread of Stock Exchanges, 1980-1998 No. 340 The Costs and Benefits of Euroisation in Central-Eastern Europe Before or Instead of EMU Membership No. 339 Debt Overhang and Barter in Russia No. 338 Firm Performance and the Political Economy of Corporate Governance: Survey Evidence for Bulgaria, Hungary, Slovakia and Slovenia No. 337 Investment and Instability No. 336 The Evolution of the Insurance Sector in Central and Eastern Europe and the former Soviet Union No. 335 Institutional Technology and the Chains of Trust: Capital Markets and Privatization in Russia and the Czech Republic No. 334 The Evolution of Market Integration in Russia No. 333 Efficiency and Market Share in Hungarian Corporate Sector No. 332 Search-Money-and-Barter Models of Financial Stabilization No. 331 Worker Training in a Restructuring Economy: Evidence from the Russian Transition No. 330 Economic Development in Palanpur 1957-1993: A Sort of Growth No. 329 Trust, Organizational Controls, Knowledge Acquisition from the Foreign Parents, and Performance in Vietnamese International Joint Ventures No. 328 Comparative Advertising in the Global Marketplace: The Effects of Cultural Orientation on Communication No. 327 Post Privatization Enterprise Restructuring No. 326 Who is Afraid of Political Instability?
Authors Jozef Konings
Date of Paper October 2000
Patrick A. Puhani
October 2000
Alan A. Bevan and Saul Estrin
October 2000
Klaus Weber and Gerald F. Davis
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No. 325 Business Groups, the Financial Market and Modernization No. 324 Restructuring with What Success? A Case Study of Russian Firms No. 323 Priorities and Sequencing in Privatization: Theory and Evidence from the Czech Republic No. 322 Liquidity, Volatility, and Equity Trading Costs Across Countries and Over Time No. 321 Equilibrium Wage Arrears: Institutional Lock-In of Contractual Failure in Russia No. 320 Rethinking Marketing Programs for Emerging Markets No. 319 Public Finance and Low Equilibria in Transition Economies; the Role of Institutions No. 318 Some Econometric Evidence on the Effectiveness of Active Labour Market Programmes in East Germany No. 317 A Model of Russia’s “Virtual Economy” No. 316 Financial Institutions, Financial Contagion, and Financial Crises No. 315 Privatization versus Regulation in Developing Economies: The Case of West African Banks No. 314 Is Life More Risky in the Open? Household Risk-Coping and the Opening of China’s Labor Markets No. 313 Networks, Migration and Investment: Insiders and Outsiders in Tirupur’s Production Cluster No. 312 Computational Analysis of the Impact on India of the Uruguay Round and the Forthcoming WTO Trade Negotiations No. 311 Subsidized Jobs for Unemployed Workers in Slovakia No. 310 Determinants of Managerial Pay in the Czech Republic No. 309 The Great Human Capital Reallocation: An Empirical Analysis of Occupational Mobility in Transitional Russia No. 308 Economic Development, Legality, and the Transplant Effect No. 307 Community Participation, Teacher Effort, and Educational Outcome: The Case of El Salvador’s EDUCO Program No. 306 Gender Wage Gap and Segregation in Late Transition No. 305 The Gender Pay Gap in the Transition from Communism: Some Empirical Evidence
Raja Kali
June 2000
Susan Linz
July 2000
Nandini Gupta, John C. Ham and Jan Svejnar
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Ian Domowitz, Jack Glen and Ananth Madhavan
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June 2000
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Martin Eichler and Michael Lechner
June 2000
R.E Ericson and B.W Ickes
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Haizhou Huang and Chenggang Xu
March 2000
Jean Paul Azam, Bruno Biais, and Magueye Dia
February 2000
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April 2000
Abhijit Banerjee and Kaivan Munshi
March 2000
Rajesh Chadha, Drusilla K. Brown, Alan V. Deardorff and Robert M. Stern
March 2000
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May 2000
Tor Eriksson, Jaromir Gottvald and Pavel Mrazek Klara Z. Sabirianova
May 2000
Daniel Berkowitz, Katharina Pistor, and Jean-Francois Richard Yasuyuki Sawada
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No. 304 Post-Unification Wage Growth in East Germany No. 303 How Does Privatization Affect Workers? The Case of the Russian Mass Privatization Program No. 302 Liability for Past Environmental Contamination and Privatization No. 301 Varieties, Jobs and EU Enlargement No. 300 Employer Size Effects in Russia No. 299 Information Complements, Substitutes, and Strategic Product Design No. 298 Markets, Human Capital, and Inequality: Evidence from Rural China No. 297 Corporate Governance in the Asian Financial Crisis No. 296 Competition and Firm Performance: Lessons from Russia No. 295 Wage Determination in Russia: An Econometric Investigation No. 294: Can Banks Promote Enterprise Restructuring?: Evidence From a Polish Bank’s Experience No. 293: Why do Governments Sell Privatised Companies Abroad? No. 292: Going Public in Poland: Case-byCase Privatizations, Mass Privatization and Private Sector Initial Public Offerings No. 291: Institutional Technology and the Chains of Trust: Capital Markets and Privatization in Russia and the Czech Republic No. 290: Banking Crises and Bank Rescues: The Effect of Reputation No. 289: Do Active Labor Market Policies Help Unemployed Workers to Find and Keep Regular Jobs? No. 288: Consumption Patterns of the New Elite in Zimbabwe No. 287: Barter in Transition Economies: Competing Explanations Confront Ukranian Data No. 286: The Quest for Pension Reform: Poland’s Security through Diversity No. 285: Disorganization and Financial Collapse No. 284: Coordinating Changes in M-form and U-form Organizations No. 283: Why Russian Workers Do Not Move: Attachment of Workers Through InKind Payments No. 282: Lessons From Fiascos in Russian
Jennifer Hunt
November 1998
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May 2000
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Tito Boeri and Joaquim Oliveira Martins Todd Idson Geoffrey G. Parker and Marshall W. Van Alstyne Dwayne Benjamin, Loren Brandt, Paul Glewwe, and Li Guo Simon Johnson, Peter Boone, Alasdair Breach, and Eric Friedman J. David Brown and John S. Earle
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March 1999
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January 2000
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February 2000
Russell Belk
February 2000
Dalia Marin, Daniel Kaufmann and Bogdan Gorochowskij
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Marek Góra and Michael Rutkowski
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Yingyi Qian, Gérard Roland and Chenggang Xu Guido Friebel and Sergei Guriev
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Corporate Governance No. 281: Income Distribution and Price Controls: Targeting a Social Safety Net During Economic Transition No. 280: Starting Positions, Reform Speed, and Economic Outcomes in Transitioning Economies No. 279 : The Value of Prominent Directors No. 278: The System Paradigm No. 277: The Developmental Consequences of Foreign Direct Investment in the Transition from Socialism to Capitalism: The Performance of Foreign Owned Firms in Hungary No. 276: Stability and Disorder: An Evolutionary Analysis of Russia’s Virtual Economy No. 275: Limiting Government Predation Through Anonymous Banking: A Theory with Evidence from China. No. 274: Transition with Labour Supply No. 273: Sectoral Restructuring and Labor Mobility: A Comparative Look at the Czech Republic No. 272: Published in: Journal of Comparative Economics “Returns to Human Capital Under the Communist Wage Grid and During the Transition to a Market Economy” Vol. 27, pp. 33-60 1999. No. 271: Barter in Russia: Liquidity Shortage Versus Lack of Restructuring No. 270: Tests for Efficient Financial Intermediation with Application to China No. 269a: Russian Privatization and Corporate Governance: What Went Wrong? No. 269: Russian Privatization and Corporate Governance: What Went Wrong? No. 268: Are Russians Really Ready for Capitalism? No. 267: Do Stock Markets Promote Economic Growth? No. 266: Objectivity, Proximity and Adaptability in Corporate Governance No. 265: When the Future is not What it Used to Be: Lessons from the Western European Experience to Forecasting Education and Training in Transitional Economies No. 264: The Institutional Foundation of Foreign-Invested Enterprises (FIEs) in China No. 263: The Changing Corporate Governance
Michael Alexeev and James Leitzel
March 1999
William Hallagan and Zhang Jun
January 2000
Yoshiro Miwa & J. Mark Ramseyer János Kornai Lawrence Peter King
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Chong-En Bai, David D. Li, Yingyi Qian and Yijiang Wang
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Albert Park and Kaja Sehrt
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Bernard Black, Reinier Kraakman and Anna Tarassova Bernard Black, Reinier Kraakman and Anna Tarassova Susan Linz
May 2000
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September 1999
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Nauro F. Campos, Gerard Hughes, Stepan Jurajda, and Daniel Munich
September 1999
Yasheng Huang
September 1999
Erik Berglof and Ernst-Ludwig von
June 1999
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Paradigm: Implications for Transition and Developing Countries No. 262: Law Enforcement and Transition No. 261: Soft Budget Constraints, Pecuniary Externality, and the Dual Track System No. 260: Missing Market in Labor Quality: The Role of Quality Markets in Transition No. 259: Do Corporate Global Environmental Standards in Emerging Markets Create or Destroy Market Value No. 258: Public Training and Outflows from Unemployment No. 257: Ownership Versus Environment: Why are Public Sector Firms Inefficient? No. 256: Taxation and Evasion in the Presence of Exortion by Organized Crime No. 255: Revisiting Hungary’s Bankruptcy Episode No. 254: FDI in Emerging Markets: A HomeCountry View No. 253: The Asian Financial Crisis: What Happened, and What is to be Done No. 252: Organizational Law as Asset Partitioning No. 251: Consumer Behavior Research in Emerging Consumer Markets: the Case of the Optimum Stimulation Level in South Africa No. 250: Property Rights Formation and the Organization of Exchange and Production in Rural China No. 249: Impacts of the Indonesian Economic Crisis: Price Changes and the Poor No. 248: Internal Barriers in the Transition of Enterprises from Central Plan to Market No. 247: Spillovers from Multinationals in Developing Countries: the Mechanisms at Work No. 246: Dynamism and Inertia on the Russian Labour Market: A Model of Segmentation No. 245: Lessons from Bank Privatization in Central Europe No. 244: Nominal-Real Tradeoffs and the Effects of Monetary Policy: the Romanian Experience No. 243: Privatization, Political Risk and Stock Market Development in Emerging Economies No. 242: Investment Financing in Russian Financial-Industrial Groups No. 241: Can governments maintain hard budget constraints? Bank lending and
Thadden Gerard Roland and Thierry Verdier Jiahua Che
May 1999 June 2000
Gary H. Jefferson
July 1999
Glen Dowell, Stuart Hart and Bernard Yeung
June 1999
Patrick A. Puhani
June 1999
Ann P. Bartel and Ann E. Harrison
June 1999
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November 1999 September 1999
Marina v.N Whitman
June 1999
Jeffrey D. Sachs and Wing Thye Woo
January 1999
Henry Hansmann and Reinier Kraakman
September 1999
Jan-Benedict E. M. Steenkamp and Steven M. Burgess
September 1999
Matthew A. Turner, Loren Brandt, and Scott Rozelle
July 1998
James Levinsohn, Steven Berry, and Jed Friedman Charalambos Vlachoutsicos
June 1999
Richard E. Caves
June 1999
Irena Grosfeld, Claudia Senik-Leygonie, Thierry Verdier, Stanislav Kolenikov and Elena Paltseva John Bonin and Paul Wachtel
May 1999 May 1999
Christian Popa
December 1998
Enrico C. Perotti and Pieter van Oijen
March 1999
Enrico C. Perotti and Stanislav Gelfer
October 1998
Octavian Carare, Constantijn Claessens, Enrico C. Perotti
January 1999
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financial isolation in Romania No. 240: Democratic Institutions and Economic Reform: the Polish Case No. 239: A Longitudinal Study of IJV Performance in Eastern Europe No. 238: Published in: Journal of Business Venturing, “Firm Creation and Economic Transitions” Vol. 14, Iss. 5,6 Sep/Nov 1999, pp. 427-450. No. 237: Analysis of Entrepreneurial Attitudes in Poland No. 236: Investment and Finance in De Novo Private Firms: Empirical Results from the Czech Republic, Hungary, and Poland No. 235: Does a Soft Macroeconomic Environment Induce Restructuring on the Microeconomic Level during the Transition Period? Evidence from Investment Behavior of Czech Enterprises No. 234: Banking Reform in China: Gradually Strengthening Pillar or Fragile Reed? No. 233: Theories of Soft Budget Constraints and the Analysis of Banking Crises No. 232: Unemployment Risk, Precautionary Savings, and Moonlighting in Russia No. 231: Investing in Turbulent Times: The Investment Behavior of Polish Firms in the Transition No. 230: The End of Moderate Inflation in Three Transition Economies? No. 229: Back to the Future: The Growth Prospects of Transition Economies Reconsidered No. 228: The Enterprise Isolation Program in Russia No. 227: Published in: Journal of Comparative Economics, “Ownership Concentration and Corporate Performance in the Czech Republic” 27(3), September 1999, pp. 498513. No. 226: Unemployment Benefit Entitlement and Training Effects in Poland during Transition No. 225: Transition at Whirlpool-Tatramat: Case Studies No. 224: Measuring Progress in Transition and Towards EU Accession: A Comparison of Manufacturing Firms in Poland, Romania, and Spain No. 223: Product Market Competition in Transition Economies: Increasing Varieties and Consumer Loyalty
John E. Jackson, Jacek Klich, and Krystyna Poznanska Keith D. Brouthers and Gary Bamossy
April 1998 June 1999
John E. Jackson, Jacek Klich, Krystyna Poznanska
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June 1999
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June 1999
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March 1999
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June 1999
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April 1999
Nauro F. Campos
April 1999
Simeon Djankov
April 1999
Stijn Claessens and Simeon Djankov
April 1999
Patrick A. Puhani
March 1999
Hans Brechbuhl and Sonia Ferencikova
March 1999
Wendy Carlin, Saul Estrin, and Mark Schaffer
March 1999
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March 1999
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No. 222: Opaque Markets and Rapid Growth: the Superiority of Bank-Centered Financial Systems for Developing Nations No. 221: Technology Spillovers through Foreign Direct Investment No. 220: Managerial, Expertise and Team Centered Forms of Organizing: A CrossCultural Exploration of Independence in Engineering Work No. 219: Household Structure and Labor Demand in Agriculture: Testing for Separability in Rural China No. 218: Competing Strategies of FDI and Technology Transfer to China: American and Japanese Firms No. 217 Published in: Journal of Comparative Economics, “Returns to Mobility in the Transition to a Market Economy” Vol. 27, No. 1, March 1999, pp. 4No. 216 Published in: Journal of Comparative Economics, “Labor Market Policies and Unemployment in the Czech Republic.” Vol. 27, No. 1, March 1999, pp. 33-60. No. 215 Published in: Journal of Comparative Economics, “Active Labor Market Policies in Poland: Human Capital Enhancement, Stigmatization or Benefit Churning?” Vol. 27, No. 1, March 1999, pp. 61No. 214 Published in: Journal of Comparative Economics, “Does the Slovenian Public Work Program Increase Participants' Chances to Find a Job?” Vol. 27, No.1, March 1999, pp. 113No. 213 Published in: Journal of Comparative Economics, “Effects of Active Labor Market Programs on the Transition Rate from Unemployment into Regular Jobs in the Slovak Republic.” Vol. 27, No. 1, March 1999, pp. 90No. 212: The Marketing System in Bulgarian Livestock Production – The Present State and Evolutionary Processes During the Period of Economic Transition No. 211: Bankruptcy Experience in Hungary and the Czech Republic No 210: Values, Optimum Stimulation Levels and Brand Loyalty: New Scales in New Populations No. 209: Inherited Wealth, Corporate Control and Economic Growth No. 208: A Cultural Analysis of Homosocial Reproduction and Contesting Claims to
Rodney Wallace
July 1999
Yuko Kinoshita
January 1999
Leslie Perlow
January 1999
Audra J. Bowlus and Terry Sicular
January 1999
W. Mark Fruin and Penelope Prime
January 1999
Tito Boeri and Christopher J. Flinn
January 1999
Katherine Terrell and Vit Sorm
November 1998
Jochen Kluve, Hartmut Lehmann, and Christoph M. Schmidt
December 1998
Milan Vodopivec
December 1998
Martina Lubyova and Jan C. van Ours
December 1998
Yordan Staykov, Team Leader
October 1998
Janet Mitchell
October 1998
Steven M. Burgess and Mari Harris
September 1998
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September 1998
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Competence in Transitional Firms No. 207: From Survival to Success: The Journey of Corporate Transformation at Haier. Forthcoming in Teaching the Dinosaurs to Dance: Organizational Change in Transition Economies ed. Daniel Denison. No. 206: Why Do People Work If They Are Not Paid? An Example from Eastern Europe. Forthcoming in Teaching the Dinosaurs to Dance: Organizational Change in Transition Economies ed. Daniel Denison. No. 205: Firm Ownership and Work Motivation in Bulgaria and Hungary: An Empirical Study of the Transition in the Mid1990s. Forthcoming in Teaching the Dinosaurs to Dance: Organizational Change in Transition Economies ed. Daniel Denison. No. 204: Human Resource Management in the Restructuring of Chinese Joint Ventures. Forthcoming in Teaching the Dinosaurs to Dance: Organizational Change in Transition Economies ed. Daniel Denison. No. 203: Emergent Compensation Strategies in Post-Socialist Poland: Understanding the Cognitive Underpinnings of Management Practices in a Transition Economy. Forthcoming in Teaching the Dinosaurs to Dance: Organizational Change in Transition Economies ed. Daniel Denison. No. 202: Corporate Transformation and Organizational Learning: The People’s Republic of China. Forthcoming in Teaching the Dinosaurs to Dance: Organizational Change in Transition Economies ed. Daniel Denison. No. 201: Foreign Direct Investment as a Factor of Change: The Case of Slovakia. Forthcoming in Teaching the Dinosaurs to Dance: Organizational Change in Transition Economies ed. Daniel Denison. No. 200: Radical versus Incremental Change: The Role of Capabilities, Competition, and Leaders. Forthcoming in Teaching the Dinosaurs to Dance: Organizational Change in Transition Economies ed. Daniel Denison. No. 199: The Emergence of Market Practices in China’s Economic Transition: Price Setting Practices in Shanghai’s Industrial Firms. Forthcoming in Teaching the Dinosaurs to Dance: Organizational Change in Transition Economies ed. Daniel Denison. No. 198: The Application of Change
Arthur Yeung and Kenneth DeWoskin
July 1998
Irina L. Zinovieva
May 1998
Robert A. Roe, Irina L. Zinovieva, Elizabeth Dienes, and Laurens A. ten Horn
May 1998
Nandani Lynton
April 1998
Marc Weinstein
March 1998
Meinolf Dierkes and Zhang Xinhua
March 1998
Sonia Ferencikova
February 1998
Karen L. Newman
February 1998
Douglas Guthrie
February 1998
Dr. János Fehér
January 1998
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Management Methods at Business Organizations Operating in Hungary: Challenges in the Business and Cultural Environment and First Practical Experiences. Forthcoming in Teaching the Dinosaurs to Dance: Organizational Change in Transition Economies ed. Daniel Denison. No. 197: Organizational Changes in Russian Industrial Enterprises: Mutation of DecisionMaking Structures and Transformations of Ownership. Forthcoming in Teaching the Dinosaurs to Dance: Organizational Change in Transition Economies ed. Daniel Denison. No. 196: Understanding and Managing Challenges to the Romanian Companies during Transition. Forthcoming in Teaching the Dinosaurs to Dance: Organizational Change in Transition Economies ed. Daniel Denison. No. 195: Insider Lending and Economic Transition: The Structure, Function, and Performance Impact of Finance Companies in Chinese Business Groups. Forthcoming in Teaching the Dinosaurs to Dance: Organizational Change in Transition Economies ed. Daniel Denison. No. 194: Japanese Investment in Transitional Economies: Characteristics and Performance. Forthcoming in Teaching the Dinosaurs to Dance: Organizational Change in Transition Economies ed. Daniel Denison. No. 193: Building Successful Companies in Transition Economies. Forthcoming in Teaching the Dinosaurs to Dance: Organizational Change in Transition Economies ed. Daniel Denison. No. 192: Russian Communitariansim: An Invisible Fist in the Transformation Process of Russia. Forthcoming in Teaching the Dinosaurs to Dance: Organizational Change in Transition Economies ed. Daniel Denison. No. 191: Teaching the Dinosaurs to Dance No. 190: Strategic Restructuring: Making Capitalism in Post-Communist Eastern Europe. Forthcoming in Teaching the Dinosaurs to Dance: Organizational Change in Transition Economies ed. Daniel Denison. No. 189: Published in: Regional Science and Urban Economics, “Russia’s Internal Border”, 29 (5), September 1999. No. 187: Corporate Structure and Performance in Hungary
Igor B. Gurkov
January 1998
Dan Candea and Rodica M. Candea
January 1998
Lisa A. Keister
December 1997
Paul W. Beamish and Andrew Delios
November 1997
Dr. Ivan Perlaki
January 1998
Charalambos Vlachoutsicos
July 1998
Michal Cakrt Lawrence P. King
September 1997 September 1997
Daniel Berkowitz and David N. DeJong
July 1998
László Halpern and Gábor Kórsöi
July 1998
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No. 186: Performance of Czech Companies by Ownership Structure No. 185: Firm Performance in Bulgaria and Estonia: The effects of competitive pressure, financial pressure and disorganisation No. 184: Investment and Wages during the Transition: Evidence from Slovene Firms No. 183: Investment Portfolio under Soft Budget: Implications for Growth, Volatility and Savings No. 181: Delegation and Delay in Bank Privatization No. 180: Financing Mechanisms and R&D Investment No. 179: Organizational Culture and Effectiveness: The Case of Foreign Firms in Russia No. 178: Output and Unemployment Dynamics in Transition No. 177: Published in: Economics of Transition,, “Bureaucracies in the Russian Voucher Privatization” Vol. 8, No. 1, 2000, pp. 37-57. No. 176: Chronic Moderate Inflation in Transition: The Tale of Hungary No. 175: Privatisation and Market Structure in a Transition Economy No. 174: Ownership and Managerial Competition: Employee, Customer, or Outside Ownership No. 173: Intragovernment Procurement of Local Public Good: A Theory of Decentralization in Nondemocratic Government No. 172: Political Instability and Growth in Proprietary Economies No. 171: Published in Post-Communist Economies, “Framework Issues in the Privatization Strategies of the Czech Republic, Hungary, and Poland” Vol. 11, no. 1 March 1999. No. 170: Published in: European Journal of Political Economy “Privatization, Ownership Structure and Transparency: How to Measure a Real Involvement of the State” 15(4), November 1999, pp. 605-18. No. 169 Published in: American Economic Review, “Unemployment and the Social Safety Net during Transitions to a Market Economy: Evidence from Czech and Slovak Men.” Vol. 88, No. 5, Dec. 1998, pp. 11171142.
Andrew Weiss and Georgiy Nikitin
June 1998
Jozef Konings
July 1998
Janez Prasnikar and Jan Svejnar
July 1998
Chongen Bai and Yijiang Wang
July 1998
Loránd Ambrus-Lakatos and Ulrich Hege
July 1998
Haizhou Huang and Chenggang Xu
July 1998
Carl F. Fey and Daniel R. Denison
January 1999
Vivek H. Dehejia and Douglas W. Dwyer
January 1998
Guido Friebel
June 1998
János Vincze
June 1998
John Bennett and James Maw
June 1998
Patrick Bolton and Chenggang Xu
June 1998
Chong-en Bai, Yu Pan and Yijiang Wang
June 1998
Jody Overland and Michael Spagat
August 1998
Morris Bornstein
June 1998
Frantisek Turnovec
May 1998
John C. Ham, Jan Svejnar, and Katherine Terrell
December 1998
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THE WILLIAM DAVIDSON INSTITUTE AT THE UNIVERSITY OF MICHIGAN BUSINESS SCHOOL
No. 167: Voucher Privatization with Investment Funds: An Institutional Analysis No. 166: Published in: Marketing Issues in Transitional Economies, “Value Priorities and Consumer Behavior in a Transitional Economy: The Case of South Africa” ed. Rajeev Batra. No. 164: Finance and Investment in Transition: Czech Enterprises, 1993-1994 No. 163: European Union Trade and Investment Flows U-Shaping Industrial Output in Central and Eastern Europe: Theory and Evidence No. 162: Skill Acquisition and Private Firm Creation in Transition Economies No. 161: Corruption in Transition No. 160a: Tenures that Shook the World: Worker Turnover in Russia, Poland and Britain No. 160: Tenures that Shook the World: Worker Turnover in the Russian Federation and Poland No. 159: Does Market Structure Matter? New Evidence from Russia No. 158: Structural Adjustment and Regional Long Term Unemployment in Poland No. 157: Baby Boom or Bust? Changing Fertility in Post-Communist Czech Republic and Slovakia No. 156 Published in: Leadership and Organization Development Journal, “Leading Radical Change in Transition Economies.” Vol. 19, No. 6, 1998, pp. 309-324. No. 155 Published in: Oxford Review of Economic Policy, “From Theory into Practice? Restructuring and Dynamism in Transition Economies.” Vol. 13, No. 2, Summer 1997, pp. 77-105. No. 154: The Model and the Reality: Assessment of Vietnamese SOE Reform— Implementation at the Firm Level No. 153 Published in: Journal of Comparative Economics, “Causes of the Soft Budget Constraint: Evidence on Three Explanations.” Vol. 26, No. 1, March 1998, pp. 104-116. No. 152 Published in: Comparative Economic Studies, “Enterprise Restructuring in Russia’s Transition Economy: Formal and Informal Mechanisms.” Vol. 40, No. 2, Summer 1998, pp. 5-52. No. 151: Labor Productivity in Transition: A Regional Analysis of Russian Industry
David Ellerman
March 1998
Steven M. Burgess and Jan-Benedict E.M. Steenkamp
August 1998
Ronald Anderson and Chantal Kegels
September 1997
Alexander Repkine and Patrick P. Walsh
April 1998
Zuzana Brixiova and Wenli Li
October 1999
Susanto Basu and David D. Li Hartmut Lehmann and Jonathan Wadsworth
May 1998 November 1999
Hartmut Lehmann and Jonathan Wadsworth
June 1998
Annette N. Brown and J. David Brown
June 1998
Hartmut Lehmann and Patrick P. Walsh
June 1997
Robert S. Chase
April 1998
Karen L. Newman
June 1998
Wendy Carlin and Michael Landesmann
June 1997
Edmund Malesky, Vu Thanh Hung, Vu Thi Dieu Anh, and Nancy K. Napier
July 1998
David D. Li and Minsong Liang
March 1998
Susan J. Linz and Gary Krueger
April 1998
Susan J. Linz
May 1998
Working Papers are available at: www.wdi.bus.umich.edu
THE WILLIAM DAVIDSON INSTITUTE AT THE UNIVERSITY OF MICHIGAN BUSINESS SCHOOL
No. 150: Tax Avoidance and the Allocation of Credit. Forthcoming in Financial Systems in Transition: The Design of Financial Systems in Central Europe eds. Anna Meyendorff and Anjan Thakor. No. 149: Commitment, Versatility and Balance: Determinants of Work Time Standards and Norms in a Multi-Country Study of Software Engineers No. 148: Changes in Poland’s Transfer Payments in the 1990s: the Fate of Pensioners No. 147: Environmental Protection and Economic Development: The Case of the Huaihe River Basin Cleanup Plan No. 146: Chief Executive Compensation During Early Transition: Further Evidence from Bulgaria No. 145 Published in: Economics of Transition, “Women’s Unemployment During the Transition: Evidence from Czech and Slovak Micro Data,” Vol. 7, No. 1, May 1999, pp. 47-78. No. 144: Investment and Wages in Slovenia No. 143 Published in: Review of Financial Studies, “Optimal Bankruptcy Laws Across Different Economic Systems,” 12(2), Summer 1999, pgs. 347-77. No. 142: Industrial Policy and Poverty in Transition Economies: Two Steps Forward or One Step Back? No. 141: Collective Ownership and Privatization of China’s Village Enterprises No. 140: A Comparative Look at Labor Mobility in the Czech Republic: Where have all the Workers Gone? No. 139: The Failure of the Government-Led Program of Corporate Reorganization in Romania No. 138: Ownership and Employment in Russian Industry: 1992-1995 No. 137 Published in: Journal of Political Economy, “Reform Without Losers: An Interpretation of China’s Dual-Track Approach to Transition,” Feb. 2000; Vol. 108, Iss.1; pg. 120 No. 136 Published in: European Economic Review, “The Political Economy of Mass Privatization and the Risk of Expropriation,” 44(2), February 2000, pgs. 393-421 No. 135: Radical Organizational Change: The Role of Starting Conditions, Competition, and Leaders
Anna Meyendorff
June 1998
Leslie Perlow and Ron Fortgang
April 1998
Bozena Leven
June 1998
Robert Letovsky, Reze Ramazani, and Debra Murphy
June 1998
Derek C. Jones, Takao Kato, and Jeffrey Miller
June 1998
John Ham, Jan Svejnar, and Katherine Terrell
May 1998
Janez Prasnikar Elazar Berkovitch and Ronen Israel
May 1998 March 1998
Susan J. Linz
March 1998
Suwen Pan and Albert Park
April 1998
Vit Sorm and Katherine Terrell
April 1999
Simeon Djankov and Kosali Ilayperuma
September 1997
Susan J. Linz
March 1998
Lawrence J. Lau, Yingyi Qian, and Gerard Roland
November 1997
Klaus M. Schmidt
March 1998
Karen L. Newman
January 1998
Working Papers are available at: www.wdi.bus.umich.edu
THE WILLIAM DAVIDSON INSTITUTE AT THE UNIVERSITY OF MICHIGAN BUSINESS SCHOOL
No. 134: To Restructure or Not to Restructure: Informal Activities and Enterprise Behavior in Transition No. 133: Management 101: Behavior of Firms in Transition Economies No. 132 Published in: Quarterly Journal of Economics, “Interfirm Relationships and Informal Credit in Vietnam,” 114(4), Nov. 1999, pgs. 1285-1320 No. 131 Published in: Comparative Economic Studies, “Will Restructuring Hungarian Companies Innovate? An Investigation Based on Joseph Berliner’s Analysis of Innovation in Soviet Industry.” Vol. 40, No. 2, Summer 1998, pp. 53-74. No. 130: Published in The American Economic Review, “Changing Incentives of the Chinese Bureaucracy.” May, 1998. No. 129: Restructuring Investment in Transition: A Model of the Enterprise Decision No. 128 Published in: Comparative Economic Studies, “Job Rights in Russian Firms: Endangered or Extinct Institutions?” Vol. 40, No. 4, Winter 1998, pp. 1-32. No. 127: Accounting for Growth in PostSoviet Russia No. 126 Published in: Economics of Transition, “From Federalism, Chinese Style, to Privatization Chinese Style,” 7(1), 1999, pgs. 103-31 No. 125: Market Discipline in Conglomerate Banks: Is an Internal Allocation of Cost of Capital Necessary as Incentive Device? Forthcoming in Financial Systems in Transition: The Design of Financial Systems in Central Europe eds. Anna Meyendorff and Anjan Thakor. No. 124: Financial Discipline in the Enterprise Sector in Transition Countries: How Does China Compare? No. 123: Considerations of an Emerging Marketplace: Managers’ Perceptions in the Southern African Economic Community No. 122: A Model of the Informal Economy in Transition Economies No. 121: Local Labour Market Dynamics in the Czech and Slovak Republics No. 119: Institutional Upheaval and Company Transformation in Emerging Market Economies No. 118: Industrial Decline and Labor
Clifford Gaddy and Barry W. Ickes
May 1998
Josef C. Brada
March 1998
John McMillan and Christopher Woodruff
February 1998
John B. Bonin and Istvan Abel
March 1998
David D. Li
January 1998
Richard E. Ericson
January 1998
Susan J. Linz
January 1998
Daniel Berkowitz and David N. DeJong
January 1998
Yuanzheng Cao, Yingyi Qian, and Barry R. Weingast
December 1997
Arnoud W. A. Boot and Anjolein Schmeits
November 1997
Shumei Gao and Mark E. Schaffer
February 1998
Brent Chrite and David Hudson
February 1998
Simon Commander and Andrei Tolstopiatenko Peter Huber and Andreas Worgotter
November 1997 November 1997
Karen L. Newman
March 1998
John S. Earle
October 1997
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THE WILLIAM DAVIDSON INSTITUTE AT THE UNIVERSITY OF MICHIGAN BUSINESS SCHOOL
Reallocation in Romania No. 117: Notes for an Essay on the Soft Budget Constraint No. 116: Labor Demand During Transition in Hungary No. 115: Enterprise Performance and Managers’ Profiles No. 114b Employment and Wages in Enterprises under Communism and in Transition: Evidence From Central Europe and Russia No. 114: Employment and Wage Behavior of Enterprises in Transitional Economies No. 113: Preliminary Evidence on Active Labor Programs’ Impact in Hungary and Poland No. 111: Unemployment Benefits and Incentives in Hungary: New Evidence No. 110: Published in: Empirical Economics, “Long-Term Unemployment, Unemployment Benefits and Social Assistance: The Polish Experience” Empirical-Economics; 23(1-2), 1998, pages 55-85. No. 109 Published in: Industrial and Labor Relations Review, “Markets for Communist Human Capital: Returns to Education and Experience in Post-Communist Czech Republic and Slovakia.” Vol. 51, No. 3, April 1998, pp. 401-423. No. 107: The Worker-Firm Matching in the Transition: (Why) Are the Czechs More Successful Than Others? No. 106 Published in: Journal of Comparative Economics, “Job Creation, Job Destruction and Growth of Newly Established, Privatized and State-Owned Enterprises in Transition Economies: Survey Evidence from Bulgaria, Hungary, and Romania,” Vol. 26, No.3, September 1998, pp. 429-445. No. 105: Getting Behind the East-West [German] Wage Differential: Theory and Evidence No. 104: The Birth of the “Wage Curve” in Hungary, 1989-95 No. 103: Published in: Journal of Comparative Economics, “Grime and Punishment: Job Insecurity and Wage Arrears in the Russian Federation” 27, 595-617 (1999). No. 102: Social Networks in Transition No. 101: Depreciation and Russian Corporate Finance: A Pragmatic Approach to Surviving
Lorand Ambrus-Lakatos
January 1997
Gabor Korosi
October 1997
Simeon Djankov and Stijn Claessens
December 1997
Swati Basu, Saul Estrin, and Jan Svejnar
April 2000
Swati Basu, Saul Estrin, and Jan Svejnar
October 1997
Christopher J. O’Leary
October 1997
Joachim Wolff
October 1997
Marek Gora and Christoph M. Schmidt
April 1997
Robert S. Chase
October 1997
Daniel Münich, Jan Svejnar, and Katherine Terrell
October 1997
Valentijn Bilsen and Jozef Konings
September 1998
Michael Burda and Christoph Schmidt
May 1997
Gabor Kertesi and Janos Kollo
October 1997
Hartmut Lehmann, Jonathan Wadsworth, and Alessandro Acquisti
October 1997
Lorena Barberia, Simon Johnson, and Daniel Kaufmann Susan J. Linz
October 1997
Working Papers are available at: www.wdi.bus.umich.edu
November 1997
THE WILLIAM DAVIDSON INSTITUTE AT THE UNIVERSITY OF MICHIGAN BUSINESS SCHOOL
the Transition No. 100: Romanian Financial System Reform No. 99: Proceedings of the Conference on Strategic Alliances in Transitional Economies, held May 20, 1997 at the Davidson Institute No. 98: Institutions, Strain and the Underground Economy No. 97: Structure and Strain in Explaining Inter-Enterprise Arrears No. 96: Resource Misallocation and Strain: Explaining Shocks in Post-Command Economies No. 95: Published in: Finance-a-Uver, “Czech Money Market: Emerging Links Among Interest Rates.” 48(2) 1998 pp. 99-109. No. 94: Pre-Reform Industry and the State Monopsony in China No. 93: China’s State-Owned Enterprises In the First Reform Decade: An Analysis of a Declining Monopsony No. 92: Expatriate Management in the Czech Republic No. 91: China and the Idea of Economic Reform No. 90 Published in: China Economic Review, “China’s State Enterprise Reform: An Overseas Perspective.” Vol. 8, Spring 1997, pp. 89-98. No. 89: The Economic Determinants of Internal Migration Flows in Russia During Transition No. 88: Gender Wage Gaps in China’s Labor Market: Size, Structure, Trends No. 87: Privatisation in Central and Eastern Europe No. 86: Published in : Economics of Transition, “The Effect of Privatization on Wealth Distribution in Russia.” v. 7, no. 2, 1999, pp. 449-65 No. 85: Was Privatization in Eastern Germany a Special Case? Some Lessons from the Treuhand No. 84: Start-ups and Transition No. 83: Which Enterprises (Believe They) Have Soft Budgets after Mass Privatization? Evidence from Mongolia No. 82: Published in: European Economic Review, “Unemployment Dynamics and the Restructuring of the Slovak Unemployment Benefit System.” April, 1997. No. 81: Determinants of Unemployment Duration in Russia
Anna Meyendorff and Anjan V. Thakor Edited by Cynthia Koch
November 1997 May 1997
Daniel Daianu and Lucian Albu
November 1997
Daniel Daianu
November 1997
Daniel Daianu
November 1997
Jan Hanousek and Evzen Kocenda
November 1997
Xiao-Yuan Dong and Louis Putterman
October 1997
Xiao-Yuan Dong and Louis Putterman
October 1997
Richard B. Peterson
September 1997
Thomas G. Rawski
April 1997
Thomas G. Rawski
July 1997
Annette N. Brown
July 1997
Margaret Maurer-Fazio, Thomas G. Rawski, and Wei Zhang Saul Estrin
July 1997
Michael Alexeev
February 1998
Uwe Siegmund
September 1997
Daniel M. Berkowitz and David J. Cooper James Anderson, Georges Korsun, and Peter Murrell
September 1997 October 1997
Martina Lubyova and Jan C. van Ours
June 1997
Mark C. Foley
August 1997
Working Papers are available at: www.wdi.bus.umich.edu
June 1997
THE WILLIAM DAVIDSON INSTITUTE AT THE UNIVERSITY OF MICHIGAN BUSINESS SCHOOL
No. 80: The Many Faces of Information Disclosure No. 79: Published in: Journal of Finance, “Foreign Speculators and Emerging Equity Markets.”v.22, iss. 2, 2000, pp. 565-613 No. 78: The Relationship Between Economic Factors and Equity Markets in Central Europe No. 77 Published in: Economics of Transition, “A Gini Decomposition Analysis of Inequality in the Czech and Slovak Republics During the Transition,” Vol. 6, No.1, May 1998, pp. 2346. No. 76: China’s Emerging Market for Property Rights: Theoretical and Empirical Perspectives No. 75b: Test of Permanent Income Hypothesis on Czech Voucher Privatization No. 74: Determinants of Performance of Manufacturing Firms in Seven European Transition Economies No. 73 Published in: Economics of Transition, “The Restructuring of Large Firms in Slovak Republic.” Vol. 6, No. 1, May 1998, pp. 6785 No. 72: Law, Relationships, and Private Enforcement: Transactional Strategies of Russian Enterprises No. 71: Giving Credit Where Credit Is Due: The Changing Role of Rural Financial Institutions in China No. 70: Privatization Versus Competition: Changing Enterprise Behavior in Russia No. 69: Russian Managers under Storm: Explicit Reality and Implicit Leadership Theories (A Pilot Exploration) No. 68: The Political Economy of CentralLocal Relations in China: Inflation and Investment Controls During the Reform Era No. 67: Between Two Coordination Failures: Automotive Industrial Policy in China with a Comparison to Korea No. 66 Published in: Post-Soviet Geography and Economics, “Red Executives in Russia’s Transition Economy.” Vol. 27, No. 10, November 1996, pp. 633-651. No. 65 Published in: Industrial and Corporate Change, “On the Sequencing of Privatization in Transition Economies.” Vol. 7, No. 1, 1998. No. 64: Published in: Journal of Law and Economics, “Foreign Ownership and Profitability: Property Rights, Control and the
Arnoud W.A. Boot and Anjan V. Thakor
October 1997
Geert Bekaert and Campbell R. Harvey
August 1997
Jan Hanousek and Randall K. Filer
June 1997
Thesia I. Garner and Katherine Terrell
May 1998
Gary H. Jefferson and Thomas G. Rawski
June 1997
Jan Hanousek and Zdenek Tima
October 1997
Stijn Claessens, Simeon Djankov, and Gerhard Pohl
February 1997
Simeon Djankov and Gerhard Pohl
May 1998
Kathryn Hendley, Peter Murrell, and Randi Ryterman
November 1998
Albert Park, Loren Brandt, and John Giles
March 1997
John S. Earle and Saul Estrin
Spring 1997
Igor Gurkov
October 1998
Yasheng Huang
Spring 1997
Yasheng Huang
Spring 1997
Susan J. Linz
January 1997
Gautam Ahuja and Sumit K. Majumdar
April 1997
Pradeep K. Chhibber and Sumit K. Majumdar
April 1997
Working Papers are available at: www.wdi.bus.umich.edu
THE WILLIAM DAVIDSON INSTITUTE AT THE UNIVERSITY OF MICHIGAN BUSINESS SCHOOL
Performance of Firms in Indian Industry” 42(1), April 1999, pp. 209-38. No. 63: How Taxing Is Corruption on International Investors? No. 62: What Can We Learn from the Experience of Transitional Economies with Labour Market Policies? No. 61: Published in: Accounting Organizations and Society, “Economic Transition, Strategy and the Evolution of Management Accounting Practices: The Case of India” 24(5,6), Jul/Aug 1999, pp. 379-412. No. 60a: Enterprise Investment During the Transition: Evidence from Czech Panel Data No. 59: Published in: Journal of Law, Economics, and Organization, “Institutional Environment, Community Government, and Corporate Governance: Understanding China’s Township-Village Enterprises.” 14(1), April 1998, pages 1-23 No. 58: From the Grabbing Hand to the Helping Hand No. 57: Published in: Brookings Papers on Economic Activity, “The Unofficial Economy in Transition.” 1: 1998. No. 56: Taxes and Government Incentives: Eastern Europe vs. China No. 55: Corruption and Reform No. 54: Decentralization and the Macroeconomic Consequences of Commitment to State-Owned Firms No. 53: Published in: The International Journal of Industrial Organization, “Competitive Shocks and Industrial Structure: The Case of Polish Manufacturing.” August, 1999. . No. 52: Published in: The Quarterly Journal of Economics, “Insecure Property Rights and Government Ownership of Firms.” May, 1998. No. 51: Incentives, Scale Economies, and Organizational Form No. 50: Published in: Post-Soviet-Affairs, “End of the Tunnel? The Effects of Financial Stabilization in Russia” April-June 1997, pages 105-33 No. 49: The Evolution of Bank Credit Quality in Transition: Theory and Evidence from Romania No. 48: Where Do the Leaders Trade? Information Revelation and Interactions Between the Segments of Czech Capital
Shang-Jin Wei
February 1997
Tito Boeri
1997
Shannon W. Anderson and William N. Lanen
April 1997
Lubomír Lizal and Jan Svejnar
December 1997
Jiahua Che and Yingyi Qian
April 1997
Jiahua Che
June 2000
Simon Johnson, Daniel Kaufmann, and Andrei Schleifer
June 1997
Roger H. Gordon and David D. Li
April 1997
Susanto Basu and David Li Loren Brandt and Xiaodong Zhu
June 1996 June 1997
Pankaj Ghemawat and Robert E. Kennedy
May 1997
Jiahua Che and Yingyi Qian
May 1997
Eric Maskin, Yingyi Qian, and Chenggang Xu Barry W. Ickes, Peter Murrell, and Randi Ryterman
May 1997
Enrico C. Perotti and Octavian Carare
October 1996
Jan Hanousek and Libor Nemecek
May 1997
Working Papers are available at: www.wdi.bus.umich.edu
March 1997
THE WILLIAM DAVIDSON INSTITUTE AT THE UNIVERSITY OF MICHIGAN BUSINESS SCHOOL
Markets No. 47: Firms’ Heterogeneity in Transition: Evidence from a Polish Panel Data Set No. 46: Strategic Creditor Passivity, Regulation, and Bank Bailouts No. 45a: Published in: Journal of Public Economics, “Tax Rights in Transition Economies: A Tragedy of the Commons.” 76, 2000, pp. 369-397 No. 44a: The Information Content of Stock Markets: Why do Emerging Markets have Synchronous Stock Price Movements? (forthcoming in the Journal of Financial Economics). No. 43: Agency in Project Screening and Termination Decisions: Why Is Good Money Thrown After Bad? No. 42: Published in: Economics of Transition, “Channels of Redistribution: Inequality and Poverty in the Russian Transition.” Vol. 7 (2) 1999. No. 41: Published in: Economics of Transition, “Labour Market Characteristics and Profitability: Econometric Analysis of Hungarian Exporting Firms, 1986-1995” 6(1), May 1998, pages 145-62 No. 40: Published in: the Harvard Law Review, “The Tragedy of the Anticommons: Property in the Transition from Marx to Markets.” January 1998. No. 39: Privatization and Managerial Efficiency No. 38 Published in: The Quarterly Journal of Economics, “Disorganization.” Vol. 112, No. 4, November 1997, pp. 1091-1126. No. 37: Published in: Economics of Transition, “Transition and the Output Fall.” 7(1), 1999, pages 1-28. No. 36: Restructuring an Industry During Transition: A Two-Period Model No. 34: The East-West Joint Venture: BC Torsion Case Study No. 33 Published in: Journal of Comparative Economics, “Quantifying Price Liberalization in Russia.” Vol. 26, No. 4, December 1998, pp. 735-737. No. 32: What Can North Korea Learn from China’s Market Reforms? No. 31: Published in : China-EconomicReview, “Towards a Model of China as a Partially Reformed Developing Economy Under a Semifederalist Government.” , 9(1),
Irena Grosfeld and Jean-François Nivet
May 1997
Janet Mitchell
May 1997
Daniel M. Berkowitz and Wei Li
September 1997
Randall Morck, Bernard Yeung, and Wayne Yu
February 1999
Chong-en Bai and Yijiang Wang
May 1997
Simon Commander, Andrei Tolstopiatenko, and Ruslan Yemtsov
May 1997
László Halpern and Gabor Korosi
May 1997
Michael Heller
February 1997
Olivier Debande and Guido Friebel
May 1997
Olivier Blanchard and Michael Kremer
January 1997
Gérard Roland and Thierry Verdier
March 1997
Richard Ericson
September 1996
Sonia Ferencikova and Vern Terpstra
December 1998
Daniel Berkowitz, David DeJong, and Steven Husted
December 1998
John McMillan
September 1996
Yijiang Wang and Chun Chang
March 1997
Working Papers are available at: www.wdi.bus.umich.edu
THE WILLIAM DAVIDSON INSTITUTE AT THE UNIVERSITY OF MICHIGAN BUSINESS SCHOOL
Spring 1998, pages 1-23. No. 30: Convergence in Output in Transition Economies: Central and Eastern Europe, 1970-1995 No. 29: Published in: Economics of Transition, “Altered Band and Exchange Volatility.” Volume 6, no. 1, 1998, 173-181. No. 28: Published in: Quarterly Journal of Economics, “Public Versus Private Ownership of Firms: Evidence from Rural China.” Volume 113, no. 3, August 1998, 773-808. No. 27: East-West Joint Ventures in a Transitional Economy: The Case of Slovakia No. 26: Published in Economic Analysis “Behavior of a Slovenian Firm in Transition” Vol. 1, no. 1, 1998, 57-73. No. 25: Cultural Encounters and Claims to Expertise in Postcommunist Capitalism No. 24: ZVU a.s.: Investment Funds on the Board of Directors of an Engineering Giant No. 23: The Role of Investment Funds in the Czech Republic (joint publication with Czech Management Center) No. 22: Czech Investment Fund Industry: Development and Behaviour (joint publication with Czech Management Center) No. 21: Restructuring of Czech Firms: An Example of Gama, a.s. (joint publication with Czech Management Center) No. 20: YSE Funds: A Story of Czech Investment Funds (joint publication with Czech Management Center) No. 19: První Investicni a.s., The First Investment Corporation (joint publication with Czech Management Center) No. 18: PPF a.s., The First Private Investment Fund (joint publication with Czech Management Center) No. 17 Published in: Post-Soviet Geography and Economics, “Russia’s Managers in Transition: Pilferers or Paladins?” Vol. 37, o.7 (September 1996), pp. 397-426. No. 16: Banks in Transition—Investment Opportunities in Central Europe and Russia Edited Transcript from 31 May 1996 Conference in New York City No. 15: Marketing in Transitional Economies: Edited Transcript & Papers from 1 April 1996 Conference in Ann Arbor, Michigan No. 14: Pensions in the Former Soviet Bloc: Problems and Solutions. Published by Council on Foreign Relations. “The Coming
Saul Estrin and Giovanni Urga
February 1997
Evzen Kocenda
March 1997
Hehui Jin and Yingyi Qian
January 1997
Sonia Ferencikova
March 1997
Janez Prasnikar
February 1997
Michael D. Kennedy
February 1997
Tory Wolff
August 1995
Dusan Triska
June 1996
Richard Podpiera
May 1996
Antonin Bulin
June 1996
Michal Otradovec
November 1995
Jaroslav Jirasek
August 1995
Michal Otradovec
November 1995
Susan J. Linz and Gary Krueger
November 1996
With commentary and edited by Anna Meyendorff
January 1997
Compiled by The Davidson Institute
December 1996
Jan Svejnar
November 1996
Working Papers are available at: www.wdi.bus.umich.edu
THE WILLIAM DAVIDSON INSTITUTE AT THE UNIVERSITY OF MICHIGAN BUSINESS SCHOOL
Global Pension Crisis” New York, 1997 No. 13: Enterprise Restructuring and Performance in the Transition. Forthcoming in Financial Systems in Transition: The Design of Financial Systems in Central Europe eds. Anna Meyendorff and Anjan Thakor. No. 12 Published in: Journal of International Marketing, “Executive Insights: Marketing Issues and Challenges in Transitional Economies.” Vol. 5, No. 4, 1997, pp. 95-114. Also published in: Marketing Issues in Transitional Economies ed. Rajeev Batra. No. 11: Worker Trust and System Vulnerability in the Transition from Socialism to Capitalism No. 10 Published in: Comparative Economic Studies, “Russian Firms in Transition: Champions, Challengers, and Chaff.” Vol. 39, No.2, Summer 1997, pp. 1-36. No. 9: Corporate Debt Crisis and Bankruptcy Law During the Transition: The Case of China No. 8 Published in: Journal of Comparative Economics, “A Theory of Ambiguous Property Rights in Transition Economies: The Case of the Chinese Non-State Sector.” Vol. 23, No. 1, August 1996, pp. 1-19. No. 7: The Foreign Economic Contract Law of China: Cases and Analysis No. 3: Bank Privatization in Hungary and the Magyar Kulkereskedelmi Bank Transaction Replacing Nos. 1-2 & 4-6: Journal of Comparative Economics Symposium on “Bank Privatization in Central Europe and Russia.” Vol. 25, No. 1, August 1997.
Lubomir Lizal, Miroslav Singer, and Jan Svejnar
December 1996
Rajeev Batra
April 1997
Andrew Schotter
August 1996
Susan J. Linz
July 1996
David D. Li and Shan Li
December 1995
David D. Li
June 1996
Dong-lai Li
June 1993
Roger Kormendi and Karen Schnatterly
May 1996
No. 1 “Bank Privatization in Transitional Economies” by Roger Kormendi and Edward Snyder. No. 2 “Transactional Structures of Bank Privatizations in Central Europe and Russia” by Anna Meyendorff and Edward A. Snyder. No. 4 “Bank Privatization in Poland: The Case of Bank Slaski” by Jeffery Abarbaness and John Bonin. No. 5 “Bank Privatization in Post-Communist Russia: The Case of Zhilsotsbank” by Jeffery Abarbanell and Anna Meyendorff and No. 6 “”The Czech Republic’s Commercial Bank: Komercni Banka” by Edward A. Snyder and Roger C. Kormendi.
August 1997
Working Papers are available at: www.wdi.bus.umich.edu
