Trade Reorientation and Productivity Growth in Bulgarian Enterprises

25 Pages Posted: 20 Oct 2004

See all articles by Simeon Djankov

Simeon Djankov

London School of Economics & Political Science (LSE); Peterson Institute for International Economics

Bernard Hoekman

European University Institute - Robert Schuman Centre for Advanced Studies (RSCAS); Centre for Economic Policy Research (CEPR); Economic Research Forum (ERF)

Date Written: January 1997

Abstract

There are a growing number of studies establishing partial correlations between firm restructuring in Central and Eastern European countries and firm-specific variables relating to initial conditions, hardening of budget constraints, and corporate governance. This paper extends the literature on the microeconomics of transition by investigating the relative importance of integration into world markets as a determinant of productivity growth at the level of the firm. We examine detailed firm-level quarterly data on over 1,300 industrial firms in Bulgaria over the 1992-95 period. We find that shifts in the pattern of imports of intermediates - and reorientation of export production - towards global markets are positively correlated with subsequent total factor productivity growth. The analysis supports the theoretical findings in the endogenous growth literature that trade matters in increasing enterprise productivity.

JEL Classification: D24, F14, O52, P31

Suggested Citation

Djankov, Simeon and Hoekman, Bernard, Trade Reorientation and Productivity Growth in Bulgarian Enterprises (January 1997). Available at SSRN: https://ssrn.com/abstract=11049

Simeon Djankov

London School of Economics & Political Science (LSE) ( email )

Houghton Street
London, WC2A 2AE
United Kingdom

Peterson Institute for International Economics ( email )

1750 Massachusetts Avenue, NW
Washington, DC 20036
United States

Bernard Hoekman (Contact Author)

European University Institute - Robert Schuman Centre for Advanced Studies (RSCAS) ( email )

via Boccaccio 121
Florence, Florence 50133
Italy

Centre for Economic Policy Research (CEPR)

London
United Kingdom

Economic Research Forum (ERF) ( email )

21 Al-Sad Al-Aaly St.
(P.O. Box: 12311)
Dokki, Cairo
Egypt