Rules, Regulations and Transaction Costs in Transition Bulgaria

Table 38
Cost (days and
money) to ensure
performance by
defaulting
partners
Total Production Trade Services
Days Levs Days Levs Days Levs Days Levs
Arithmetical mean 148.93 2775.22 28.79 4,300 92.83 3,003.85 754.6 126.25
Median 15 225 20 500 12 500 20 127.5
Minimum 0 0
Maximum 3,650 24,000
Valid cases 43 22 14 5 24 13 5 4
Sofia Large district
centre
Smaller town
Days Levs Days Levs Days Levs
Arithmetical mean 101.42 400 234.82 2,591.67 89.58 4,107.86
Median 90 500 14 225 10 200
Valid cases 7 3 17 12 19 7
The large dispersion in the responses is quite logical. The duration and the cost of the process differ from case to
case depending on the type of problem, the method of settlement chosen, etc.
III.D Transformation or Exit Costs
In a dynamic and frequently changing business environment, such as that in Bulgaria, the costs of transforming or
leaving the business are also very important. They must be reduced to a minimum in order to enable the firms to
survive in times of market crises.
The question "What would you do if the market of your business shrinks dramatically?" was answered
mostly by "shrinking the administrative and labour costs". The next two choices were "shrinking the external
marketing costs" and "entering another business sector". (See Table 39).
Table 39
(More than one answer allowed)
Valid percentage
YES
Total Production Trade Services Sofia Large
district
centre
Smaller
town
Shrinking
administrative costs
(rentals, telephone
etc.)
64.0 71.0 63.2 53.3 60.0 71.4 61.0
Shrinking labour
costs
64.0 67.7 61.8 66.7 75.0 60.0 62.7
Shrinking external
costs of marketing
goods/services
41.2 48.4 39.7 33.3 35.0 34.3 47.5
Entering another
business sector
42.6 45.2 40.6 46.7 35.0 50.0 40.7
Liquidation of firm 23.5 12.9 26.1 33.3 20.0 27.8 22.0
Others 12.3 9.7 14.7 6.7 15.0 5.7 15.3
46