Institutional reforms, productivity and profitability: From rents to competition?

Nigel L. Driffield, Tomasz Mickiewicz, Yama Temouri

    Research output: Contribution to journalArticlepeer-review

    27 Scopus citations

    Abstract

    This paper explores the divergent effects of institutional reforms on firm's productivity and profits. To assess this empirically, we investigate the impact of various components of economic liberalisation on the performance of firms from Central and Eastern European countries from 1998 to 2006. The impact of reforms on profitability vis-à-vis productivity differs, which we interpret as an indication that profitability is an ambiguous measure of performance: one needs to distinguish between unproductive rents and productivity-based quasi-rents. We find that competition-enhancing liberalisation measures have more impact on state owned firms as compared with domestic and foreign owned firms.

    Original languageBritish English
    Pages (from-to)583-600
    Number of pages18
    JournalJournal of Comparative Economics
    Volume41
    Issue number2
    DOIs
    StatePublished - May 2013

    Keywords

    • FDI
    • Institutions
    • Privatisation
    • Productivity
    • Profits

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