The Role of the New, Entrepreneurial Private Sector in Transition and Economic Performance in Light of the Successes in Poland, the Czech Republic and Hungary

Abstract

The central theme of this paper is the role of the new, entrepreneurial private sector, established after the fall of communism, in output recovery, and, more generally, in economic expansion of post-communist economies. This role is considered specifically in the context of the successes in Poland, the Czech Republic, and Hungary. The author notes a substantial difference between the performance of the new private sector and the privatized sector in the short to medium run (3-7 years) from the start of privatization.New private firms typically enter the economic game with well-established de jure and de facto property rights and with industrial relations based on market economy rules. Unlike the public sector or privatized firms, the labor force of these firms is not demoralized by the change to market-economy rules. As a result, they often perform better and are quick to increasing their share of aggregate output. This also helps the economy as a whole emerge earlier from transitional recession.The author discusses two hypothetical paths of recovery and expansion; one with and one without a dynamic new private sector. The determinants for establishing and growth of new private firms are considered. In addition to the specific rules and general framework of transition, the study concludes that broad institutional fundamentals of political liberty, law and order, and trust contribute to the successful emergence of this new entrepreneurial sector.

Development of Entrepreneurial Activity in the Czech Republic over the Years 2005–2017

“…As the assumption of the positive impact of entrepreneurship on economic growth is based mainly on findings from developed countries, it is crucial to explore entrepreneurship in other countries that have not been studied before, as recommended by Davidsson [26,27], and to see whether the traditional patterns described in entrepreneurship literature are valid or not. Such an example might be countries of the former Soviet Union that experienced the process of economic transition during the early 1990s [28][29][30][31][32][33][34][35][36][37][38][39] Cieślik and Van Stel [33] further explain that the former soviet socialist regime might have influenced current behaviour of economic agents (employees, entrepreneurs) in the society, and thus there might be different patterns of economic (and entrepreneurial) behaviour compared to those observed in developed countries.…”

The Role of Family Start Ups in the Emergence of a Small Business Sector in Bulgaria

“…This observation is also evidenced in a range of research studies that draw attention to the conditions of the macro-environment (Mugler, 2000;Fogel andZapalska, 2001, McMillan andWoodruff, 2002;Benacek, 1995;Winiecki, 2003), privatisation processes (Spicer, 2000;Martin and Grbac, 1998) and competitive skills (Wachtel, 1999;Fitzgerald, 2002) that are needed for stimulating entrepreneurship. Other inquirers highlight cultural issues and the ways in which these shape entrepreneurial orientations (Mueller and Goic, 2002;Lee and Peterson, 2000;Pfirrman and Walter, 2002) leading to particular types of entrepreneurial strategies (such as prospecting, networking, boundary blurring, Peng, 2001) or international modes of market entry (Nakos and Brouthers, 2002).…”

“…But much of this activity is family situated and embedded. This means that although several studies have highlighted the family-entrepreneurial aspects of transition (Muller et al 2002;McMillan and Woodruff, 2002;Peng, 2001;Pistrui et al 1997;Poutziouris et al 1997;Wachtel, 19999;Winiecki, 2003), this potentially significant aspect of entrepreneurship in transition situations is not being fully realised. All of the businesses surveyed in this study were first generation businesses.…”

Entrepreneurship in Transitional Economies: Review and Integration of Two Decades of Research

“…However, the focus has shifted toward the identification of the types of barriers (formal, informal, environmental and skills) that entrepreneurs face (Aidis, 2005), writing about Lithuania, the evolution of entrepreneur-friendly institutions and diffusion of entrepreneurial values (Kshetri, 2007); writing about China, the advantages of de novo entrepreneurial ventures over privatized SOEs (Winiecki, 2003); writing about Poland, the Czech Republic and Hungary. Of special note in this more recent literature is the marked decrease of published studies on the role of the gray economy as well as corruption and bribery (from 11 to 5 and from 5 to 1, respectively).…”