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Enterprise Group

The Enterprise group will study the effects of privatization and liberalization policies on firm-level behavior and performance. Much of the research will be carried out in a comparative framework, with the Ukrainian estimates compared with those from other transition economies.
The Enterprise group will analyze the following topics:

    • The effects of privatization on total factor productivity in industrial enterprises, using comprehensive panel data on formerly state-owned enterprises from 1989 to 2002. Recent data work permits to distinguish foreign from domestic ownership.
    • The role played by product market competition in fostering productivity growth using the industrial enterprise panel. Both domestic competition and import penetration will be studied.
    • The consequences of privatization for firm behavior in the labor market. Does privatization reduce employment and wages? A first study uses the enterprise panel to estimate these effects.
    • The effects of privatization and restructuring on individual workers. Using the ULMS, possibly linked to enterprise data, the analysis will control for individual worker characteristics and permit an assessment of which worker types (e.g., by age, gender, education) may have been hurt most or benefited most from restructuring.
    • The reallocation of resources between firms, the contributions of the reallocation process to productivity growth, and the effects of liberalization and privatization on the pace of productivity-enhancing reallocation. This study will use universal data on all Ukrainian firms to enable clear longitudinal linking and accurate measures of between-firm reallocation, entry, and exit in all sectors.

The group is led by John Earle, CEU and Upjohn Institute and David Brown, Heriot-Watt University. Volodymyr Vakhitov, an EERC graduate who is now studying for PHD at the University of Kentucky and is instructor at EERC will be research associate for for the Enterprise Group.