The industrial organization of developing countries is characterized by: (i) pervasive use of subcontracting arrangements among small firms, (ii) "missing middle" in the firm size distribution, and (iii) financially constrained firms.  This paper studies an incomplete contract model in which...

This paper develops a general equilibrium model endogenizing labor specialization, firm size, firm specialization, interfirm trade, and economic fragmentation. In contrast to the standard neoinstitutionalist understanding of firms and markets as substitutes in organizing production, firms and...

During the Soviet period industrial firms not only formed the backbone of the economy but also directly provided a wide range of benefits to their municipalities. Firms were in charge of supplying a great variety of social services, such as housing, medical care and day care. The need to divest...

The make-or-buy decision is analyzed in a three-layer principal-management-agent model. There is a cost-saving/quality tradeoff in effort provision. The principal chooses between employing an in-house management and contracting with an independent management; the cost-saving incentives facing...

The make-or-buy decision is analyzed in a three-layer principal-management-agent model. There is a cost-saving/quality tradeoff in effort provision. The principal chooses between employing an in-house management and contracting with an independent management; the cost-saving incentives facing...

Did the unbundling the railways in the Czech Republic ensure efficient railway transportation? The separation of railway operators and infrastructure is supposed to ensure efficient railway transportation. However, the experience with the unbundling of the railway operation in the Czech Republic...

The configuration of industrial enterprises in Romania, in terms of numbers and structure, in relation to their characteristics, mirrors the Romanian economy and society at large, in their chronological development. Marked by the changes in the technological and economic paradigm, by the...

This paper formulates a positive model that predicts when parties will employ private ordering to enforce their agreements. The typical enforcement mechanism associated with private ordering is the reputation mechanism, when a merchant community punishes parties in breach of contract by denying...

Does unbundling ensure efficient railway transportation? The separation of railway operators and infrastructure is supposed to ensure efficient railway transportation. However, the experience with the unbundling of the railway operation in the Czech Republic suggests that unbundling does not...

This paper analyzes the relationship of ownership concentration and firm performance in the context of different institutional environments in 28 Central and Eastern European transition economies. Using the BEEPS data for the period from 2002 to 2009 we find an inverted u-shaped relation of...