The effect of competition and ownership structure on company performance in Romanian food industry: a large-sample panel estimation for transition years

In this paper I study company performance using a dataset of Romanian food industry over fifteen years of transition period. The factors analyzed in terms of their effect on performance are foreign and domestic competition and the type of ownership. The aim is to conduct a post-privatization, post-liberalization period analysis of competition and ownership effects in the Romanian food industry. I estimate a log-linearized production function augmented by competition and ownership variables, calculated using the national level four-digit NACE industry delimitation of the relevant market. I find some evidence that product market competition is counterproductive in this specific industry but to a lesser extent in the case of privately owned companies, having its effect differentiated between ownership forms. My study provides some further evidence towards the existence of a dominant firm with competitive fringe setup in Romanian food industry and to the complementary nature of ownership and competition effects.