Mitra, PradeepMuravyev, AlexanderSchaffer, Mark E.2012-03-192012-03-192009-01-01https://hdl.handle.net/10986/4017This paper uses firm-level data from the Business Environment and Enterprise Performance Surveys to study the process of convergence of transition countries with developed market economies. The study focuses on competition and market structure, finance and the structure of lending to firms, and how firms respond to the economic environment by restructuring. The authors find substantial evidence of convergence in a number of dimensions. The pattern of growth at the country, sector, and firm levels shows rapid growth of the new private sector and of the micro and small-firm sectors, with the size distribution of firms moving toward the pattern observed in the surveys of developed market economies. In finance, increasing reliance on retained earnings in transition countries reflects a maturation of the sector as new firms come to rely less on informal and family sources of finance. The authors find evidence of an inverse-U pattern, with the peak of restructuring activity taking place in 2002, the middle of the period analyzed. Throughout, the regional patterns suggest greater convergence in the transition countries that joined the European Union in 2004 than in the other, lower-income transition economies.CC BY 3.0 IGOACCOUNTINGACCOUNTING STANDARDSADVANCED COUNTRIESBANK BORROWINGBANK FINANCINGBANK LOANBRANCHESBUSINESS CYCLEBUSINESS ENVIRONMENTBUSINESS INFRASTRUCTURECAPITAL ACCUMULATIONCAPITAL MARKETSCAPITAL STOCKCAPITALIST ECONOMIESCOMPETITIVE MARKETCOMPETITIVE MARKETSCOMPETITORSCOST OF FINANCECOUNTRY DUMMIESDEVELOPING COUNTRIESDOMESTIC COMPETITIONDOMESTIC COMPETITIONSDOMESTIC MARKETDOWNSIZINGDUMMY VARIABLEDUMMY VARIABLESECONOMIC DEVELOPMENTECONOMIC GROWTHECONOMIC RECOVERYECONOMIC STRUCTUREECONOMICSEMPLOYMENTEMPLOYMENT GROWTHENTERPRISE FINANCEENTERPRISE PERFORMANCEENTERPRISE RESTRUCTURINGENTREPRENEURSHIPEQUITY FINANCINGEXPANSIONEXPORTERSEXTERNAL FINANCEEXTERNAL FINANCINGFACTOR MARKETSFINANCIAL CONSTRAINTSFINANCIAL CRISISFINANCIAL DEVELOPMENTFINANCIAL INSTITUTIONSFINANCIAL MARKETSFINANCIAL RISKFINANCIAL SECTORFINANCING OBSTACLESFIRM GROWTHFIRM PERFORMANCEFIRM SIZEFIRMSFIXED INVESTMENTFOREIGN COMPETITIONFOREIGN MARKETSFOREIGN OWNERSFOREIGN OWNERSHIPGLOBALIZATIONGROWTH RATEGROWTH RATESHUMAN CAPITALINCOMEINCOME LEVELINCOME LEVELSINFLATIONINFLATION RATESINFORMAL FINANCEINNOVATIONINSTRUMENTINTERNAL FINANCINGINTERNATIONAL BANKINTERNATIONAL TRADEINVESTMENT CLIMATEJOB CREATIONJOB CREATION RATESLABOR MARKETLABOR PRODUCTIVITYLEGAL PROTECTIONLEGAL SYSTEMLENDERSLICENSINGLIVING STANDARDSLOANLOANS FROM FAMILYLOCAL MARKETLOW-INCOME COUNTRYMARKET CONDITIONSMARKET ECONOMIESMARKET ECONOMYMARKET ENVIRONMENTMARKET POWERMARKET STRUCTUREMATURE MARKETMONEY LENDERSMONOPOLYMOTIVATIONNEGATIVE SHOCKNEW MARKETNEW MARKETSNEW PRODUCTNEW PRODUCTSOLIGOPOLYOUTPUTOWNERSHIP STRUCTUREPRICE ELASTICITY OF DEMANDPRIVATE SECTOR GROWTHPRIVATIZATIONPRODUCT MARKETSPRODUCT QUALITYPRODUCTIVITYPRODUCTIVITY GROWTHPROFIT OPPORTUNITIESPROPERTY RIGHTSRAPID EXPANSIONRAPID GROWTHRETURNRISK MANAGEMENTSALESSIZE OF FIRMSSMALL FIRMSMALL FIRMSSOCIALIST ENTERPRISESSOFT BUDGET CONSTRAINTSOFT BUDGET CONSTRAINTSSTARTUPSTATE BANKSTATE BANKSSTOCK MARKETSSUPPLIERSSUSTAINABLE GROWTHTRADINGTRANSITION COUNTRIESTRANSITION COUNTRYTRANSITION ECONOMIESTRANSITION ECONOMYUSE OF BANK CREDITWorld Bank10.1596/1813-9450-4819