Competitiveness of Czechoslovak Exports under Socialism and its Impact on Industries’ Output Growth after 1989

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Year of publication 2020
Type Article in Periodical
Magazine / Source Economics of Transition and Institutional Change
MU Faculty or unit

Faculty of Economics and Administration

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Keywords Foreign trade; socialist Czechoslovakia; competitiveness; production growth; transition period
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Description This paper addresses the performance of international trade during the centrally planned period in socialist Czechoslovakia and its consequences in the transition period. The goal of the paper is to determine whether the relative export competitiveness before 1989 positively influenced the performance of the enterprises in the transition period. To determine the reason for the low competitiveness of socialist enterprises, we use the oral history method, based on interviews with the then managers. We show that the level of competitiveness was influenced by multiple factors. Some of them were of a systemic nature, such as incentive structure, which did not encourage managers to pursue higher productivity, and others were related to day-to-day operations of the enterprises and a lack of Western technologies. Consequently, an econometric analysis is applied to determine whether there was any relationship between competitiveness in late socialism (ability to export to world markets) and production growth in the transition period. We expected that sectors that were able to export to Western markets during the centrally planned period were more successful after the fall of the regime. Nevertheless, our findings do not support this hypothesis.
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