and as they manifest themselves in the BEEPS surveys. In Sections IV and V, we analyze the evidence on convergence in two dimensions of the business environment: competition and financing. Section VI looks at how firms have responded in terms of restructuring. Section VII concludes.
Sample description, country classification and benchmarking
The Business Environment and Enterprise Performance Surveys (BEEPS) have been conducted by the World Bank and EBRD since 1999. As the name suggests, the focus of the interviews with firm managers is the business environment in which firms are operating, but the data collected also include key figures about the firm, including sales, inputs, and growth. Most of the data gathered have come from three waves of surveys – 1999, 2002 and 2005 – implemented in nearly all the transition countries of Central and Eastern Europe and the former Soviet Union. The BEEPS were extended in 2004 and 2005 to include a range of comparator countries from Western Europe and East Asia.
Survey samples were constructed by random sampling from a national registry of firms or equivalent, with oversampling of some additional categories of firms to ensure reasonable subsample sizes. The firms covered are drawn from industry and services,3 and, like the population of firms in countries around the world, are mostly SMEs (see Table II.1). A majority of the firms surveyed in the transition countries (60% in 1999, rising to 75% in 2005) are new private sector firms, i.e., they were private from the point of startup. Privatized firms make up about 15-25% of the sample, and the remaining 10- 15% were state-owned enterprises (SOEs). The shares of both privatized and SOEs in the BEEPS transition samples have been falling over time. The samples from the non- transition market economy comparator countries include very few SOEs and privatized firms, which means that our benchmark is the market economy private sector.
3 A small number of firms in agriculture, fishery, forestry as well as in power generation in the 1999 BEEPS survey are classified in this paper as manufacturing.