Entry and exit in a transition economy: The case of Poland

The purpose of this paper is to examine the industrial entry and exit in a transition economy, over the interval of change from a predominately state-owned productive system. The data set employed offers a near-exhaustive coverage of manufacturing firms in Poland. The paper estimates entry and exit equations across 152 3-digit industries, using an adaptation of an Orr Shapiro/ Khemani-type model to allow for the special circumstances of a transition economy. The results suggest that, despite the turbulence of the immediate post-transition period, the patterns of entry and exit behaviour in Poland correspond closely to those observed in more mature market economies.