Structural Adjustment, Ownership Transformation, and Size in Polish Industry

The authors argue that significant adjustment took place in Polish industry after Poland's 1990 reforms. They analyze data on two- and three-digit manufacturing industries, disaggregated by firm ownership and size. By applying a statistical model to labor productivity growth, they try to disentangle structural determinants of the recovery from cyclical determinants. They contend that structural determinants outweigh cyclical ones. They find that the productive response of state enterprises was markedly different from that of private firms - private firms outperformed state enterprises (just as anecdotal evidence suggested). Size also matters, at least among private firms. Generally, there seem to be increasing returns to scale for private firms, except for very large enterprises (many of which were previously state-owned and may need further restructuring). The fact that size does not appear to matter among public enterprises suggests that several of them have not yet adopted optimal technologies and production processes