Determinants of Enterprise Performance during Transition

Abstract

To date, the analysis of the development of countries with economies in transition has focused primarily on the macroeconomic component, in particular on macroeconomic stabilization. This is partly due to the fact that the greatest progress in Eastern Europe has been made in the macroeconomic sphere.  However, practice shows that it is difficult to maintain macroeconomic stability without paying much attention to micro-level reforms that contribute to the growth of economic efficiency of enterprises. While privatization has contributed to reform at the micro level, there is clear evidence that it is a necessary but far from sufficient condition for successful microeconomic development. This work contains a review of modern ideas about what factors influence enterprise performance and restructuring their activities. Each paragraph consists of two subsections, the first of which analyzes the theoretical basis and the experience gained by Western experts on the topic under study; the second section discusses the possibility of applying Western theory to the realities of transitional economies. Paragraph 1 begins with a review of the performance indicators of enterprises and examples of their use in research activities and restructuring of enterprises in the economies of Western countries. The second part of this section analyzes the applicability of these indicators to the study of processes occurring in transition economies. Paragraphs 3 and 4 analyse the relationship between efficiency, restructuring and property relations and efficiency, restructuring and financing. The final paragraph contains the main conclusions of the work.