| This paper is a rough draft of a reflection about the causes of restructuring in transition economies (TEs), resulting from questions arisen after reading the profuse literature related to restructuring. Since the beginning of the 1990s, the number of enterprise restructuring determinants under study has grown to include competition, budget constraints, ownership, human capital and institutions. When most existing studies focus on the impact of one to three different determinants, we will try to know if the simultaneous study of all five determinants could lead to a global and coherent explanation of the restructuring process. For this study, I will refer to the Bulgarian experience with restructuring, and try to evaluate the articulation between its potential causes. Given the variety of problems that hamper quantitative analysis of enterprise restructuring in TEs, I chose to refer to qualitative restructuring indicators, following the distinction between “defensive” and “strategic” measures. During the first half of the 1990, competition and harder budget constraint (cut in subsidies) have spurred some defensive adjustment measures, while unconditional bank lending and the bad quality of institutions have hampered more substantial restructuring. More recently, we find that change in ownership and hardened budget constraints do not act necessarily in the same direction, with respect to restructuring, and are, furthermore, dependent on the quality of institutions and on the degree of (foreign) competition. |
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