Employment dynamics of newly established and traditional firms : a comparison of Russia and the Ukraine

In this paper we test the effects of ownership, competition and disorganisation on firm level employment dynamics using a unique data set of 150 Russian and 300 Ukrainian firms. Our results, in contrast to findings in Central and East European Countries, suggest that newly established firms do not out perform those that existed under central planning during the transition process. In addition, while competition seems to play no role in employment determination, disorganisation is shown to constrain firm employment in the Ukraine but not in Russia. Such outcomes are explained by the nature and timing of restructuring in these countries.