The Business Environment in the Transition

19 Pages Posted: 21 Sep 2012

See all articles by Wendy Carlin

Wendy Carlin

University College London - Department of Economics; Centre for Economic Policy Research (CEPR)

Mark E. Schaffer

Heriot-Watt University - Centre for Economic Reform and Transformation; Centre for Economic Policy Research (CEPR); IZA Institute of Labor Economics

Date Written: September 20, 2012

Abstract

Following the collapse of planning, new small and medium-sized firms rapidly emerged in all transition economies. Using firm level data, we investigate the interaction between the widespread opportunities for new business activities such firms faced and their business environment. The business environment includes physical infrastructure, the availability of an educated labor force, provision of administrative and judicial services, the control of corruption and crime, and the stability of the macroeconomic environment. By comparing how different elements of the business environment affected firms in formerly planned economies with those in economies outside transition, we document not only the challenges faced by transition firms but also the effects of the planning legacy.

Keywords: infrastructure, human capital, institutions, planned economy, transition, business environment

JEL Classification: D290, H490, M290, P210

Suggested Citation

Carlin, Wendy and Schaffer, Mark E., The Business Environment in the Transition (September 20, 2012). CESifo Working Paper Series No. 3934, Available at SSRN: https://ssrn.com/abstract=2149433

Wendy Carlin (Contact Author)

University College London - Department of Economics ( email )

Gower Street
London WC1E 6BT, WC1E 6BT
United Kingdom
+44 20 7679 5858 (Phone)
+44 20 7916 2775 (Fax)

Centre for Economic Policy Research (CEPR)

London
United Kingdom

Mark E. Schaffer

Heriot-Watt University - Centre for Economic Reform and Transformation ( email )

School of Management - Department of Economics
Edinburgh EH14 4AS
United Kingdom
+44 131 451 3494 (Phone)
+44 131 451 3008 (Fax)

HOME PAGE: http://www.hw.ac.uk/ecoWWW/cert

Centre for Economic Policy Research (CEPR)

London
United Kingdom

IZA Institute of Labor Economics

P.O. Box 7240
Bonn, D-53072
Germany

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