1992 Articles

Structural adjustment policies and productive efficiency of socialist enterprises

Prasnikar, Janez; Svejnar, Jan; Klinedinst, Mark

The paper uses panel data from a five percent stratified random sample of Yugoslav industrial enterprises to test several hypotheses about the determinants of productive efficiency. The estimating procedure selects the production function best supported by the data and allows for industry-specific production function parameters as well as from firm-specific fixed or random effects. The instrumental variable estimates suggest that productive efficiency is unaffected by the four structural/policy variables whose effect we examine: the extent of export orientation, joint venture status, divisionalization of the firm, and the firm's market share.