ABSTRACT
The transition process of former centrally-planned economies into market economies had far-reaching effects on the institutional environment of the respective countries. While a large number of studies on transition processes focused on the national level, the regional dimension of institutional change during transition is less well understood. Because of the interrelatedness between formal and socially-embedded informal institutions, it is expected that institutional change in transition economies does not necessarily result in a level playing field for all kinds of actors at all locations. Institutional change might happen faster in some regions than in others and new formal institutions might be enforced differently based on their congruence with informal institutions. A multi-scalar approach seems to be best suited to deal with the complexities of institutional change and its spatial dimension.
Previous research on regional development in Central and Eastern Europe has shown that capital regions and regions close to the EU border realized a higher economic performance during the transition process than other regions. This paper argues that similar differences can be expected in Ukraine, a transition country with a post-Soviet context. This hypothesis will be tested empirically by using original firm survey data on the perception of local institutional quality. The capital region (Kyiv) is compared to a region that borders the EU (Lviv) and a region that borders Russia (Kharkiv). Furthermore, foreign subsidiaries (greenfield and brownfield) are compared to domestic firms (privatized state-owned firms and new private firms). The significance of differences in the perception of local institutional quality among regions and ownership types will be tested by descriptive statistics and logistic regression models. The results are qualitatively assessed against the specific context of the three regions, taking into account their Soviet legacy and their more recent development path during the post-Soviet transition period.
