New survey data for a panel of Polish firms are used to study employment and wage adjustment in state-owned enterprises, and insider- and outsider-controlled privatized firms. In contrast to earlier studies, dynamic panel data estimators allow for endogeneity of observed variables and partial adjustment to shocks. Asymmetric demand and productivity shocks have differing effects across ownership categories that are missed by the simpler and more aggregated specifications used in the previous literature. We confirm rent-seeking behavior in insider-controlled firms and find a significant employment growth-wage effect. © 2002 Association for Comparative Economic Studies. Published by Elsevier Science (USA). All rights reserved.
- Insider vs outsider
- Transition economies