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Developed economies with high-cost environments face industrial transitions from scale-based manufacturing (MAN) to knowledge, technology and intangible asset-based…
Developed economies with high-cost environments face industrial transitions from scale-based manufacturing (MAN) to knowledge, technology and intangible asset-based sectors. The purpose of this paper is to examine the changes in employment and value-adding profiles of transitioning industry sectors in Australia and discuss the implications for policy that influences the intellectual capital (IC) profile of industrial sectors in transition.
The approach borrowed concepts from the firm-level strategic management literature and applied them to a macro level of industry analysis. In this paper the authors examine the transitions in the Australian economy which, due to a rising cost base, is experiencing a decline in its value chain-oriented MAN sector. The authors contrast four industry sectors with the MAN sector and examine the different value creation models.
The findings clearly show how the contribution to employment and value added (termed Economic Value Contribution ) of the different sectors vary. The authors extend these findings to a discussion on policy and the dimensions of IC that may have a role to play in facilitating transitions within an economy. The main conclusion is that a more rapid transition and higher value may be created if innovation and entrepreneurship are facilitated by targeted policies in transitioning sector.
This work is based on a single country analysis of selected industry sectors. Further work needs to be done across many more countries to contrast the findings across nations/regions that differ in industrial complexity and to refine the analytical framework to improve construct validity and increase analytical power.
This work has implications for policy-makers facing the challenges of a transitioning economy, whether national or regional. Governments that are hands-on with respect to interventions to salvage and/or extend the life of sectors are at risk of missing opportunities to build the capacities and capabilities of emerging sectors while those governments that are hands-off, deferring to market mechanisms, risk transitions that are too little and/or too late to maintain a national or regional competitiveness.
To the authors knowledge, this is the first attempt to integrate the specific firm-level strategic management perspectives, used in this paper, with the macro-policy level to examine industry sectors with the twin metrics of economic productivity and employment in transitioning economies.
The paper aims to examine the reality of, and, conditions for economic growth for former Soviet and Soviet Block economies with special attention to Ukraine and the…
The paper aims to examine the reality of, and, conditions for economic growth for former Soviet and Soviet Block economies with special attention to Ukraine and the Russian Federation. Many of these economies' transition from “Communism” remain plagued by problems of institutional design and outcomes characterized by high levels of corruption and low levels of accountability and transparency. The purpose of this paper is to analyze aspects of these socio‐economic realities in the context of contemporary economic theory and ongoing revisions to it.
The type of economic theory used to assess issues of transition has significant implications for public policy. Conventional economic theory has traditionally focused on secure private property rights, competitive markets, inclusive of “flexible” labor markets, as the necessary if not the sufficient conditions to successfully and quickly transition from command style to market economies. Little attention is paid to the details of institutional design. The paper applies a behavioral‐institutional analytical framework to analyze important aspects of failures and successes in transition economies using both economic and governance data sets.
The paper finds that traditional measures of economic freedom are far from sufficient to generate economic growth. Accountability and transparency in governance structures is also required. Economic failure and success are closely connected with overall performance in socio‐economic governance. Also an unnecessary emphasis on low wages, highly constrained social safety nets and labor market policy impedes successful growth and development.
Transition economies' economic performance can be significantly enhanced through improvements in institutional design that facilitates the evolution of high‐wage market economies. The market in and of itself does not suffice to generate successful transitions from command to vibrant market economies.
This paper provides an original exposé and analysis of transition economies from a behavioral‐institutionalist perspective, with important public policy implications.
This study explains the international opportunity development of SMEs from emerging economies during institutional transition. This research enriches our understanding of…
This study explains the international opportunity development of SMEs from emerging economies during institutional transition. This research enriches our understanding of how these firms adopt different approaches to developing international opportunities when they confront the turbulent institutional environment. We develop a phase-based framework for the evolution of transitional institution for SMEs’ internationalization and the SMEs’ internationalization process in that framework. By providing an empirical case study of a privately owned SME from China, the main finding is that SMEs from emerging economies become more entrepreneurial and proactive in developing the international opportunity during the institutional transition.
The development of the Russian banking sector was subject to numerous criticisms and pessimistic forecasts in the recent years. The observers pointed out the low ability…
The development of the Russian banking sector was subject to numerous criticisms and pessimistic forecasts in the recent years. The observers pointed out the low ability of the Russian banking sector to provide financial intermediation in the economy and thus to perform the key functions which society expects from the banking sector – mobilization of savings and financing investments in the real sector of the economy. The study seeks to explain above-mentioned features from institutional, economic, and political perspective on the basis of the existing knowledge of the nature of transition banking.
The last decade of this century has witnessed the transition of the formerly centrally planned economies of Europe and Asia to market economies, a process affecting some…
The last decade of this century has witnessed the transition of the formerly centrally planned economies of Europe and Asia to market economies, a process affecting some 1.7 billion people in 28 countries. While much agreement exists on the sorts of reform measures required, disagreement exists over their sequencing. The economic and social performance of these transition economies has varied considerably and for a variety of reasons, however China’s performance, in particular, has been outstanding. The paper reviews the reform measures required for economic transition, and alternative sequencing approaches to these reforms. It conducts an overview of the performance of the transition economies, with focus placed upon the experience of the Chinese economy. An analysis of China’s approach to economic reform, its key components, major outcomes and outstanding issues are discussed. Key lessons to be derived for other transition economies from China’s experience are also presented.
While the liberalization of economies within the transition paradigm is viewed to take place primarily on a macroeconomic (primary) level, this paper switches emphasis to…
While the liberalization of economies within the transition paradigm is viewed to take place primarily on a macroeconomic (primary) level, this paper switches emphasis to the secondary and tertiary level of post-transition. While macroeconomic reforms may provide the playing field, secondary reforms level the playing field and tertiary reforms develop the capabilities necessary for firms and individuals within firms to compete in the landscape of liberalized economies. It is necessary to examine the transformations on three levels. First, the development of public policy and institutions aimed at regulating certain industries or firms. Second, the explicit market strategies of firms operating in the industries that shape market structure and inform public policy. Third, the nonmarket strategies of firms aimed at influencing the form and substance of public policy. Drawing on research in three related areas: institutional voids (IVs), the role of market and nonmarket strategies of firms, respectively, this paper examines the current state of transition in CEE/FSU countries. The main conclusions of the paper are first, transition and post-transition has been and continues to be profoundly impacted by the liberalizing influences of multinational firms. Second, this causation from the strategies and tactics of multinational firms to the extent of transition also helps to explain the degree of modernization of economies in a given transition economy. Third, it is important to distinguish between local and foreign firms on the transition process. Foreign firms are more likely to pursue liberalization agendas when it strengthens their competitive advantage over local firms. Conversely, local firms – especially those who rely on the capacity to navigate institutional voids – may be opposed to liberalization, as liberalization would threaten their sources of competitive advantage.
Entrepreneurial activity is a critical issue in the transition of economies attempting to reduce, or abolish state-owned monopoly enterprises. In many Central and Eastern…
Entrepreneurial activity is a critical issue in the transition of economies attempting to reduce, or abolish state-owned monopoly enterprises. In many Central and Eastern European countries, privatization, restructuring, and failure of state-owned enterprises as consequences of the reforms typically led to a reduction of the size of the workplace. For example, in Poland, about 3.5 million employees lost their jobs in the period 1991–1996 (PEAD, 2003). After the collapse of communism in Europe, post-communist countries have undertaken reforms to liberalize their economies. These reforms stimulated the development in the private sector of small and medium-sized enterprises. New ventures provide a counterbalance to the loss of jobs at state-owned companies. In the period 1991–1996, new enterprises in the private sector in Poland created more than 1.8 million jobs. By the end of 2002, they provided work for 68% of the total employed persons (PEAD, 2003). Further, new ventures can play a critical role in stimulating economic growth. As a result of market reforms, the contribution of the private sector to Gross Domestic Product, e.g., in Hungary, went from 7% in 1988 to 85% in 1999 (World Bank, 2000). However, many new ventures do not survive the first year of operation. For example, in Poland, about 40–45% enterprises established in the period 1995–2000 failed after the first year of their existence (PEAD, 2003).
The purpose of this chapter is to introduce emerging markets (EMs) and then European transition economies in which alliance transformation takes place. Considering the…
The purpose of this chapter is to introduce emerging markets (EMs) and then European transition economies in which alliance transformation takes place. Considering the complexity of EMs, researchers and academics feel pressure in recent years to seek comprehensive understanding of the EM context (Kumar and Srivastava, 2019). Transition economies are a special category of EMs, which have attracted many multinational firms to invest after the fall of Berlin wall in the beginning of 1990s. This region constitutes of former soviet bloc, located in central and eastern Europe. After a short introduction and discussion on the importance on EMs, development process within EMs is taken up. Transition economies are then introduced, particularly in relation to their link with the European Union. Aims and research questions are outlined to display the objective and direction of the study. The next section discusses major contributions, followed by limitations of the study describing what issues are left out to concentrate on the research object. Finally, it is shortly described what other chapters are coming and what they deal with.
This chapter presents a description of transition economies of Europe focusing different aspects related to the economic development of this area. First, the transition…
This chapter presents a description of transition economies of Europe focusing different aspects related to the economic development of this area. First, the transition economies are introduced. Later on, political conditions, cultural factors affecting these countries, and economic situation are presented. Referring earlier studies and different factors, a new classification of transition economies is offered.
To have critical perspective, some of the performances of transition economies are compared with BRICS countries, which have been particularly focused as major economies of the emerging markets. Finally, the case countries are presented.
In the absence of well-developed, formal institutional frameworks, informal network-based strategies have been argued to be especially viable in emerging economies…
In the absence of well-developed, formal institutional frameworks, informal network-based strategies have been argued to be especially viable in emerging economies. However, some empirical research has challenged these earlier theoretical arguments. In light of new evidence, this chapter develops a contingency perspective differentiating firms' networks as strong ties and weak ties. It suggests that while strong-tie networks are typically found during the early phase of institutional transitions, weak-tie networks are more likely to be developed and leveraged during the late phase of transitions. The upshot is that as the performance benefits of strong ties decline during institutional transitions, emerging weak ties' impact on firm performance is likely to increase.