Institutional barriers and job creation in Central and Eastern Europe

Abstract

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

Growth Disparities Among Regions of the Visegrad Group Countries: An Evidence of Their Extent and Nature

“…These regions have not only become eligible recipients for funding from the European structural funds and from the Cohesion fund, but also the de facto platform for reviewing the effectiveness of redistribution mechanisms in terms of fulfi lling the objectives of cohesion policy and partly also the effi ciency of the entire European integration project. This fact has been documented by numerous recent studies that have focused on the progress of less developed countries and regions, as well as their inclusion in the EU (Dobrinsky & Havlik, 2014;Cuaresma, Oberhofer, & Vincelette, 2014;Forgó & Jevčák, 2015;Zdražil, 2014). This paper focuses on the Visegrad Group countries (the Czech Republic, Hungary, Poland, and Slovakia) that belong among the transformed economies of the former Eastern Bloc and whose regions can be generally regarded as less developed when compared with the regions of the traditional EU countries (EU 15).…”

“…In this paper we follow especially the literature where the Visegrad Group states have been examined. We follow both the classical studies (Gardiner, Martin, & Tyler, 2004;Barro & Sala-i-Martin, 2004;Armstrong, 1995;BenDavid, 1999;Stiglitz, 1999;Fischer, Sahay, & Vegh, 1998) and the recent studies (Monfort, 2008;Dobrinsky & Havlik, 2014;Cuaresma et al, 2014;Tvrdoň, Tuleja, & Verner, 2012;Marzinotto, 2012;Forgó & Jevčák, 2015;Zdražil & Kraftová 2012;Cuaresma, Oberhofer, Smits & Vincelette, 2012;Vintrová & Žďárek, 2007;Geppert, Happich & Stephan, 2008;Tvrdoň, 2010;Barca, 2009). The literature provides mixed results on the study of growth disparities -their extent and nature; based on different approaches and its main objectives.…”

Debt Overhang, Gazelles’ Growth, and Fiscal Policy: A Note from the Quantile Regression Approach

“…As argued by Brown, Mawson, and Mason [5], at the heart of these public policies stayed the financial support for HGFs, as these firms tend to be more financially constrained in the EU [6], and their access to finance has a significant effect on their performance. However, despite the importance of gazelles for new job creation in the private sector in the developed [7] and in the developing economies alike [3,8], innovation processes [9], economic growth, and structural changes in emerging markets [10], little is known about the impact of financing decision on the gazelles' or HGSs' performance [11] and how fiscal policy affects this decision.…”

Who Persistently Creates Jobs? Absolute versus Relative High-Growth Firms

“…While there exists first empirical evidence on determinants of high-growth firms in Eastern Europe, (e.g. Cuaresma et al, 2014;Hoxha and Capelleras, 2010;Mateev and Anastasov, 2010;Mateev and Anastasov, 2011;Crnogaj and Sirec, 2014), the persistence of high growth over a longer period of time has not been studied in this context.…”

“…We use information from the firm-level dataset Amadeus, a widely used commercial database maintained by Bureau van Dijk (see, Bianchini et al, 2016or Cuaresma et al, 2014 for other studies on high-growth using Amadeus). Amadeus contains information for registered companies in Europe across all sectors of activity.…”