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Using a unique dataset comprising information for (up to) 153 firms in the machine building sector in Belarus, we investigate the determinants of firm growth for an economy where state ownership of enterprises is widespread. We use panel data models based on generalizations of Gibrat's law, total factor productivity estimates and matching methods to assess the differences in firm growth between private and state-contolled firms. Our results indicate that labor hoarding and soft budget constraints play a particularly important role in explaining differences in performance between these two groups of firms.

Using information from the Amadeus dataset and the Business Environment and Enterprise Performance Survey, we provide an empirical investigation of the industry and firm-specific determinants of the intensive margin (i.e., within existing firms) job creation process in eleven Central and Eastern European economies during the period 2002-2009. Our results indicate that during the years prior to the global financial crisis, traditional industries were crucial for the net intensive margin creation of jobs in the region but, by contrast, services firms were less vulnerable to the economic downturn. At the firm level, small and young already existing firms and subsidiaries of multinational corporate groups tended to register the highest employment growth rates. The empirical results also indicate that more productive surviving firms tended to be less vulnerable to the economic downturns in terms of employment change. The perceived quality of the business climate by enterprises of the region is robustly correlated with intensive margin employment growth both before and during the recent global financial crisis. Interestingly, the best performing surviving firms are estimated to be most negatively affected by a poor business environment. Institutional barriers thus appear as an important factor hampering firm growth in Central and Eastern Europe. These findings hold for the group of high-growth surviving firms (gazelles) that disproportionately accounted for the creation of new jobs in these economies. JEL classification: L16; L21; L25; L51; L53

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and the country economists for Europe and Central Asia region for useful comments and suggestions. 2China and large parts of East and South Asia were still humming and commodity exporters were still benefiting from the commodity price super cycle in the initial months after the onset of the GFC.3 It is a supply-side shock because the two critical factors of production have gone in short supply: (i) Workers are falling sick or dying and otherwise unable to physically be present at work, and (ii) Capital is drying up because its costs are rising, and cross-border flows are ebbing. It is a demand-side shock, because the people and firms, extremely unsure of their future, are cutting back on durable purchases and investment decisions. Quarantines, social distancing, and home confinements are cutting into demand, too, especially parts of the services sector (airlines, tourism, restaurants and so on). On top of it, trade flows have stalled, which adds to both demand and supply side pressures.