Do market pressures induce economic efficiency?: The case of Slovenian manufacturing, 1994-2001 Orazem, Peter Vodopivec, Milan Orazem, Peter
dc.contributor.department Economics 2018-02-17T17:55:39.000 2020-06-30T02:12:06Z 2020-06-30T02:12:06Z 2006-03-01
dc.description.abstract <p>Using a unique longitudinal data set on all manufacturing firms in Slovenia from 1994-2001, this study analyzes how firm efficiency changed in response to changing competitive pressures associated with the transition to market. Results show that the period was one of atypically rapid growth of total factor productivity (TFP). The rise in firm efficiency occurs across almost all industries and firm types: large or small; state or private; domestic or foreign-owned. Changes in firm ownership type have no direct impact on firm efficiency. However, increased market competition related to rising market share of private firms, new market entrants, foreign-owned firms, and international trade raise TFP across all firms in an industry, whether private or state owned. In addition, competitive pressures that sort out inefficient firms of all types and retain the most efficient, coupled with the entry of new private firms that are at least as efficient as surviving firms, prove to be the major source of TFP gains. Results strongly confirm that market competition fosters efficiency.</p>
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dc.identifier.articleid 1151
dc.identifier.contextkey 8726478
dc.identifier.s3bucket isulib-bepress-aws-west
dc.identifier.submissionpath econ_las_workingpapers/152
dc.source.bitstream archive/|||Fri Jan 14 20:37:17 UTC 2022
dc.subject.disciplines Economics
dc.subject.keywords market pressures
dc.subject.keywords firm efficiency
dc.subject.keywords total factor productivity
dc.subject.keywords TFP
dc.subject.keywords Slovenia
dc.title Do market pressures induce economic efficiency?: The case of Slovenian manufacturing, 1994-2001
dc.type article
dc.type.genre working_paper
dspace.entity.type Publication
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