An Analysis on the Firm Performance in Transitional Countries

Abstract

This thesis examines the relationship between regional economic integration and the economic growth of member states from firm perspective by assessing the performance of services and non-services sector firms in a large sample of transitional countries engaged in regional trade integration process. Specifically, the research analyzes the firm product market performance of former communist countries in Central and Eastern Europe and Central Asia involved in regional trade integration with major economic players on the world stage – the European Union and the Russian Federation. Opposed to other studies on the related topic concentrating mostly on single country studies, this study goes beyond by broadening the knowledge on specific aspects of daily evolving markets of transition economies. The cross-sectional secondary data analysis on transitional countries provides statistically significant results pertaining to the relationship between regional economic integration and economic performance of member states from business perspective. The findings of an empirical test reveal that firms operating in countries with close trade relations with the Russian Federation outperform firms in countries preferring the trade cooperation with the European Union.