INSTITUTIONS, AND FIRMS' PERFORMANCES IN TRANSITION COUNTRIES: THE CASE OF THE SELECTED CESEE COUNTRIES

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Zoran Aralica Tonci Svilokos Katarina Bacic

Abstract

Institutional reforms in the countries of Central Eastern and South Eastern Europe (CESEE) brought about a redefinition of the role of the state, the market and the business sector. We assess the effects of various dimensions of the institutional environment on the labour productivity of manufacturing firms in selected CESEE countries by employing a multilevel model. Our findings reveal that the curbing of corruption and the provision of inter-industrial externalities through the development of a commercial and professional infrastructure have beneficial effects on firm productivity. At the same time, a stricter political and legal framework and the provision of R&D infrastructure have an adverse effect. Such a finding is typical for producers of standardised products in countries with low levels of legal framework development for which R&D and legal adjustments incur cost disadvantages. The implication is that institutional development should be accompanied by a strengthening of firms’ absorptive capacity in order for businesses to benefit from such changes.

Article Details

How to Cite
Aralica, Z., Svilokos, T., & Bacic, K. (2018). INSTITUTIONS, AND FIRMS’ PERFORMANCES IN TRANSITION COUNTRIES: THE CASE OF THE SELECTED CESEE COUNTRIES. The South East European Journal of Economics and Business, 13(1), 68-80. Retrieved from http://journal.efsa.unsa.ba/index.php/see/article/view/707
Section
Scientific and Professional papers: Economics
Author Biographies

Zoran Aralica, Institute of Economics, Zagreb

Zoran Aralica is a senior research fellow at the Institute of Economics in Zagreb. His current fields of interest include socio-economic evaluation of the use of technology, deindustrialization/reindustrialization in CESEE countries and energy sector economics. He is a visiting lecturer on Innovation Management and Technological Change at VERN Polytechnic. Zoran serves as a coordinator of H2020 project called SmartEIZ which aims to strengthen the scientific and research capacity and narrow networking gaps and deficiencies at the Institute of Economics, Zagreb (EIZ) in the field of Economics and Management of Innovation and Technology (EMIT). 

Tonci Svilokos, Department of Economics and Business Economics, University of Dubrovnik

Tonci Svilokos is Assistant Professor at the University of Dubrovnik where he teaches various financial courses. His fields of interest are monetary economics, international finance and banking. He was the member of the Senate of the University of Dubrovnik from 2002 to 2006, and from 2016 to present. Tonci was a member of the research team of several research projects and contributed as a member of the scientific committee to the realisation of numerous scientific conferences.

Katarina Bacic, Indepedent Researcher

Her scientific interests include competitiveness, international economics, regional economics and innovation.   She participated in scientific and professional projects in Croatia and abroad.