Abstract. Post transition economies carry the legacy of previous system, supposed to have collapsed in partly due to inability to sustain innovation and technical progress. In terms of innovation activity, they still lag behind advanced market economies. This brings the issue of total factor productivity (TFP) for these countries/industries/firms in focus of research interest. Relying on the TFP firmlevel estimates from the World Bank' Enterprise Survey dataset, we analyse the main contributing factors in following post-transition economies: Georgia, Turkey, Ukraine, Russia, Romania, Bosnia and Herzegovina, FYR Macedonia, Mongolia, Slovenia and Croatia. The potential determinants include variables frequently named in the literature: R&D efforts, human capital, ICT investment, competition (product market regulation) and international trade. The data for the TFP determinants is drawn from Business Environment and Enterprise Performance Survey (BEEPS V), which includes both objective variables and perceptions of firms' management. Since many objective variables are simultaneously determined with our dependent variable, we argue that by relying on perceptions we omit the endogeneity issue. In addition to aggregate firm-level TFP determinants, we also distinguish between the manufacturing and service sector. The aim of the research is to emphasize the structural differences between these two segments of post-transition economies.
This article analyses correlation of demand and supply shocks between the EMU and the CEECs in order to see whether there is some degree of business cycle coordination between them. The main interest is to investigate the impact on Croatia and compare it with other CEECs. Information on the correlation of demand and supply shocks between the EMU and CEECs is important if a country wants to join the monetary union, since synchronisation of business cycles and policy coordination will have a significant impact on willingness to enter the monetary union (unless the decision is a political one). We employ structural vector autoregression in order to identify demand and supply shocks and analyse their correlation, size and speed of adjustment. The results indicate that at the moment Croatia is far from ready for the common monetary policy of the EMU, while among other CEE countries Slovenia and Latvia have the closest connection between their business cycles and those of the EMU.
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