A critical, but largely unexamined assumption in the debate over transition policy design concerns the complementarity or substitutability of market competition and private ownership in increasing firm efficiency. We analyze a simple Cournot model that distinguishes two aspects of privatization...

Transition requires the reallocation of resources across activities through closure of inefficient firms and the creation of new firms. It also requires restructuring of existing firms where improvements in performance are feasible. Both processes are closely tied together and are aimed at...

Wage structures in transition economies usually diverge significantly from their centrally-planned predecessors. Using a matched sample of employees and enterprises, we examine the effects of privatization on wage structures in rural industry in two provinces of China. We find that privatization...