Measuring Progress in Transition and Towards EU Accession: A Comparison of Manufacturing Firms in Poland, Romania, and Spain

Abstract

This paper provides new evidence on progress in transition and the "readiness" of enterprises for accession for the EU using a detailed survey administered to approximately 200 manufacturing firms in each of Poland, Romania, and Spain. A major innovation is the use of a market economy and member country of the EU - Spain - as a benchmark against which to measure progress in transition. The paper finds that new private firms (firms established as private ab initio) in both Poland and Romania are growing the fastest, but on measures of integration and investment, it is Polish ab initio private firms and privatized firms that look most similar to the Spanish. Polish state-owned firms, and Romanian state-owned, privatized and (to a lesser extent) ab initio private firms more often lag behind. With respect to compliance with EU directives, Poland tends to lag behind Spain but lie significantly ahead of Romania. Levels of awareness of and compliance with directives did not vary with ownership type amongst the Eastern European firms. Progress in transition at the country level seems to be consistent with improvements in compliance with the major components of the acquis.