Evaluation of the Effects of Competition on Labor Productivity of Enterprises of Different Forms of Property

Abstract

The purpose of this study is to propose a theoretical model for measuring the susceptibility of companies of different ownership types to competitive selection. The study tests the hypothesis about the role of market effects for public and private companies. The peculiarity of the proposed model is that the elements of productivity and a firm’s market share are divided into three components according to the form of ownership, taking into account the market share of each form of ownership in the industry. Most of the existing research confirms that state-owned enterprises are less efficient than private ones. Taking into account this fact and the ownership structure in a number of key industries in Russia, it can be assumed that the proposed model will measure to what extent state-owned companies or companies with state participation are less susceptible to the effects of competitive selection compared to conventional firms. We can also assess the contribution of firms of each type of ownership to productivity growth of industries. The model can also be used to detect industries and forms of ownership with ineffective competition mechanisms, which makes this model particularly relevant to the Russian context.