This paper studies the role of a country's EU membership status as an explanatory factor of regulatory quality. It argues that accession to the European Union improves the quality of regulation via the implementation of pro‐competitive policies embedded in the Community Acquis. We assess this conjecture empirically for the (former) transition economies of Central and Eastern Europe, using Member States as well as developing and developed countries in Europe and Central Asia as a control group. The data used is a macro‐economic panel of 48 countries covering six three‐year periods between 1995 and 2012. We find that EU accession positively affected the quality of competition policies over and above an overall trend towards more market‐oriented policies. The improvement in competition policies was not reversed in a single country of the sample, documenting the strong and sustainable transformative power of the EU. The findings are robust when controlling for endogeneity issues.

We investigate the drivers of firm level productivity in catching-up economies by jointly estimating its relationship to innovation and competition using data from the EBRD-WB Business Environment and Enterprise Performance Survey (BEEPS) in Eastern Europe and Central Asia. The findings confirm an inverted-U shaped impact of competition on R&D. Both competition and innovation have a simultaneous positive effect on labour productivity in terms of either sales or value added per employee, as does a high share of university graduates and foreign ownership. Further positive impacts come from firm size, exports, or population density. Innovation and foreign ownership appear to be the strongest drivers of multifactor productivity. AbstractWe investigate the drivers of firm-level productivity in catching-up economies by jointly estimating its relationship to innovation and competition using data from the EBRD-WB Business Environment and Enterprise Performance Survey (BEEPS) in Eastern Europe and Central Asia. The findings confirm an inverted-U shaped impact of competition on R&D. Both competition and innovation have a simultaneous positive effect on labour productivity in terms of either sales or value added per employee, as does a high share of university graduates and foreign ownership. Further positive impacts come from firm size, exports, or population density. Innovation and foreign ownership appear to be the strongest drivers of multifactor productivity.JEL Codes: O12, O25, O31, O33, L22

This study links public sector efficiency to firm growth via several microeconomic channels. The results show that greater public administration efficiency induces higher rates of fast growing firms. Especially corruption and ineffective justice systems were identified as the factors that most impede firms' growth. In addition, public service provision that relies on fees rather than on taxes was associated with higher efficiency.

Recent studies have found reticent managers are less likely to report corruption than are non-reticent managers. We confirm this using new data from Bangladesh and Sri Lanka. We find reticence greatly affects estimates of corruption for measures based on both direct and indirect questions. We also find reticence affects response rates. Surprisingly, reticent managers were less likely to refuse to answer questions on corruption than non-reticent managers, possibly because reticent managers believe that refusing to answer seems like a tacit admission of guilt. Throughout the analysis, we control for the potential endogeneity of the reticence measure. Comparative Economic Studies (2015) 57, 103-135.

We investigate the drivers of firm‐level productivity in catching‐up economies by jointly estimating its relationship to innovation and competition using data from the EBRD‐WB Business Environment and Enterprise Performance Survey (BEEPS) in Eastern Europe and Central Asia. The findings confirm an inverted‐U shaped impact of competition on R&D. Both competition and innovation have a simultaneous positive effect on labour productivity in terms of either sales or value added per employee, as does a high share of university graduates and foreign ownership. Further positive impacts come from firm size, exports or population density. Innovation and foreign ownership appear to be the strongest drivers of multifactor productivity.