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| Tekijä: | Sacco, P.L. Scarpa, C. |
| Otsikko: | Critical mass effect and restructuring in the transition towards a market economy |
| Lehti: | European Economic Review
2000 : MAR, VOL. 44:3, p. 587-608 |
| Asiasana: | Transition economies Privatization Models |
| Vapaa asiasana: | Evolution |
| Kieli: | eng |
| Tiivistelmä: | Restructuring firms in transition economy produces a kind of network externality, in that the profitability of restructuring depends on the number of firms that already adopted this strategy. This paper investigates under what conditions a 'critical mass' exists, i.e. a situation in which such externality is positive, and restructuring spurs imitation, possibly leading to the eventual transformation of the whole economy. There is found a critical mass effect when the main effect of restructuring is an increase in value added rather than an increase in the firm's ability to compete against rival home firms. The critical mass case becomes the typical one when competition spurs firms' efficiency. |
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