Strong legacies and weak markets: Bulgarian state-owned enterprises during early transition

We examine the factors affecting the performance of state-owned enterprises (SOEs) during early transition to a market economy. Data come from a longitudinal study of a representative sample of Bulgarian SOEs for the period from 1989 (the last year under communism) to 1993 (three years after major macroeconomic shifts). We investigate how changes in authority structure, work organization, technology, marketing strategy, and organizational boundaries during these years affected organizational performance in 1993. We also assess the degree of path dependence in performance and the role of competitive industry conditions. Numerous organizational changes made by SOEs during early transition had little effect on performance. Yet organizational performance from 1989 to 1993 was highly path-dependent, although this dependence was mediated by the competitive conditions: Stronger markets displayed less path dependence. Overall the results favor the interpretations derived from selected neo-institutional and ecological perspectives of organizational sociology over neoclassical economic interpretations.

Duke Scholars

Author Kenneth C. Land Sociology