The study addresses the question of how the spatial organization of the bread industry in the Irkutsk Oblast changes under the conditions of the Russian transition economy. Using diffusion theory and regression analysis the emergence of new bakeries over time and space is analyzed. Two overlaying diffusion mechanisms determine the emergence of new enterprises in the region. The results of a cluster analysis show the characteristics of the enterprise population that can be divided into a market-oriented and a non-market oriented group of enterprises. Finally, using comparative studies from Industrial Organization the structures of bread markets are studied. The results show strong regional disparities and distortions in the emergence of markets.
