The performance of firms in transition

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The performance of firms in the transition countries is central to explaining the performance of the economy as a whole. At the start of transition, most firms were state-owned, inefficient and limited in their objectives by the dictates of central planning. To escape these limitations, a combination of privatisation, the entry of new private firms and fundamental changes to the competitive and regulatory environment has been at the core of the transition process. However, the extent to which barriers to doing business have been eliminated has varied widely across the region. This chapter uses the Business Environment and Enterprise Performance Survey (BEEPS) to analyse the factors explaining how firms have performed. The BEEPS provides data over a nine-year period that allows us to analyse how important firm characteristics and country factors are in determining performance.

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