Competitive Shocks and Industrial Structure: The Case of Polish Manufacturing

A large number of countries have recently experienced competitive shocks: sudden increases in the role that market forces play in determining the evolution of various industries. In this paper, we study the implications of Poland's competitive shock for three elements of the structure of that country's manufacturing sector: entry, concentration, and foreign presence. Our analysis underlines the importance of explicitly identifying the specific distortions built into initial (pre-shock) industrial structure and lags in their adjustment to more competitive conditions.