nep-cis New Economics Papers
on Confederation of Independent States
Issue of 2004‒12‒12
25 papers chosen by
Anna Y. Borodina
Perm State University

  1. The Economic Effects of a Russia-EU FTA By Miriam Manchin
  2. An analysis of wage arrears of coal enterprises By Elena Kondratyeva
  3. Bank failures in Russia: why do banks go bankrupt? By Marina Malyutina; Svetlana Parilova
  4. Firms with foreign participation and their influence on export activity in Russia. Firm-level panel evidence By Konstantin Kozlov; Daniil Manaenkov
  5. The Impact of Fiscal Decentralization on the Budget Revenue Inequality among Municipalities and Growth of Russian By Irina Slinko
  6. Dollarization Hysteresis in Russia By Andrey Shinkevich
  7. Private interest in public tenders: no revenue, no efficiency and no social benefits By Konstantin Sonin
  8. Labor supply in Russia: studying the role of outside opportunities of the employed By Vladimir Matveenko; Peter Saveliev
  9. Economic Effects of Belarus’ Participation in the CIS Countries Customs Union By Irina Tochitskaya; Ernest Aksen
  10. Structural changes in Russian electricity market By Aleksandr Abolmassov; Denis Kolodin
  11. Production Performance in Russian Regions: Farm Level Analysis By Irina Bezlepkina
  12. Russian stock market: participants and their strategies By Georgy Kolodyazhny; Alexey Medvedev
  13. Spatial distribution of investment in Russia: the effect of agglomeration By Valentina Lapo
  14. Electoral cycles in Ukraine By Sergey Verstyuk
  15. Monetary policy rules and their application in Russia By Anna Vdovichenko; Victoria Voronina
  16. Regional Reallocation of Russian Industry in Transition By Elizaveta Shevyakhova; Oleg Rytchkov
  17. Political economy of tariff unification: the case of Russia By Sergey Afontsev
  18. Macroeconomic Aggregate Model for Analysis of Inflation and Stabilization of the Russian Economy By Alexander Varshavsky
  19. Modelling the Saving Behavior of Households in Russia By Olga Kuzina; Yana Roshchina
  20. Arbitrage Possibilities in Russian Spot and Future Markets By Victor Chetverikov
  21. Migrations and Macroeconomic Processes in Post-socialist Russia: Regional Aspect By Igor Korel; Liudmila Korel
  22. Contingent Valuation of Drinking Water Quality in Samara City By Ekaterina Gnedenko; Zoya Gorbunova; Georgy Safonov
  23. What Determines Crime in Russian Regions? By Yury Andrienko
  24. The Impact on Ukraine of Joining the WTO: Subsidies vs. Antidumping in Ferrous Metallurgy By Igor Eremenko; Katerina Lisenkova
  25. "Transient or Chronic Poverty in Russia? The Urban and Rural Poor during the 1990s "(in Russian) By Yuka Takeda

  1. By: Miriam Manchin (Faculty of Economics, Erasmus Universiteit Rotterdam)
    Abstract: The paper examines the effects of Russia joining the WTO taking into account energy sector reform and the impact of a future Free Trade Agreement (FTA) between the enlarged EU and Russia. The paper uses Computable General Equilibrium Modelling techniques for quantifying the different possible scenarios. The scenarios include a standard assessment of the removal of tariff barriers including agriculture, services and removal of non-tariffbarriers. The results suggest that a potential FTA would be beneficial for Russia only if it would incorporate not only reduction in industrial tariffs but also in agriculture and liberalisation in services.
    Keywords: EU-Russia Free Trade Agreement; WTO accession; trade liberalization; CGE modeling
    JEL: F13 F15
    Date: 2004–11–30
  2. By: Elena Kondratyeva
    Abstract: This project utilizes panel data for 70 coal enterprises of Kuzbas region that were fully established and operated continuously between 1996 and 1998, and finds empirical evidence that negative supply shocks, liquidity problems in the region, efficiency of coal enterprises, and specific features of external opportunities in labor markets influence the occurrences of wage arrears. This work draws several major conclusions for Kuzbas region: (1) wage arrears have negative relation to demand for the output of the enterprise and are sensitive to efficiency of the enterprise, which is measured through profit/loss variable; (2) high regional average for wage arrears increases the probability that wage underpayments in a particular enterprise in this region have chronic nature; (3) the firms making a decision to withhold wages are taking into account the volume of sales and wage levels in the enterprise in previous periods. Also the form of ownership exerts the influence on the decision delay payments.
    Keywords: Russia, coal enterprises, upply shocks, liquidity, efficiency, labor markets
    JEL: J00
    Date: 2003–04–03
  3. By: Marina Malyutina; Svetlana Parilova
    Abstract: More than half of all Russian banks have gone bankrupt since the beginning of commercial banking in Russia ten years ago. It is poor macroeconomic environment that is usually blamed for banking crises. However we think that excessive risk-taking by banks themselves contributed a lot to their troubles. We model the interaction between a bank and a regulator as a dynamic game in which the regulator lacks complete information on the bank's behavior. A weak regulatory framework creates incentives for banks to take on excessive risks, while high discount rates lead to little attention being paid to banks’ reputation. We intend to test our model using an extensive data set on more than 1500 banks during 1998–1999. Possible policy implications of the project include recommendations on improving prudential regulation and creating incentives for more prudent behavior by banks.
    JEL: G21
    Date: 2003–04–03
  4. By: Konstantin Kozlov; Daniil Manaenkov
    Abstract: The paper aims to study the impact of export operations of firms with foreign participation on the export activities of domestic enterprises. Analysis of panel data covers firm-level exports as well as firm export performance on the level of individual commodity. Our research tests for the presence of industrial, regional and commodity-specific spillover effects. The results of the analysis show that spillover effects from foreign affiliate and joint venture exporters on the industry level are negative. On the regional level results are ambiguous. Higher education in a region amplifies any positive effects. Strong support is also found for the existence of positive commodity-specific spillover effects.
    Keywords: Russia, multinational firms; international business, firm behavior
    JEL: F23 D21
    Date: 2003–04–03
  5. By: Irina Slinko
    Abstract: What is the link between the fiscal decentralization, inequality among municipalities within a region, and Russian regions' welfare? Despite the conventional wisdom that fiscal decentralization is beneficial, the author suggests that the poor Russian regions do not always gain from decentralization. The author also suggests that a low initial capital endowment and long-term credit market imperfections could lead to the situation when fiscal decentralization fosters inequality within a region which, in turn, could slow down the overall regional growth. The analysis is conducted using an extensive panel dataset of Russian municipalities
    JEL: H71 H72
    Date: 2003–04–03
  6. By: Andrey Shinkevich
    Abstract: This project aims to (1) explain the forces that lead to dollarization in Russia, (2) analyze the cost and benefits of dollarization, (3) design a policy aimed at reducing dollarization, and (4) predict the consequences of making dollarization official.
    Date: 2002–04–04
  7. By: Konstantin Sonin
    Abstract: When the goods are to be publicly tendered off and it is the task of the tender officials to determine some specific characteristics of the good, their privileged status allows them to manipulate the results of the tender. In particular, if the officials are interested in getting side-transfers from bidders instead of revenue maximization, they may choose a particular pattern of characteristics to favor some particular bidder. These side transfers (bribes) may potentially become very large, especially when bidders' preferences differ substantially. In Russia and some other transition economies that have experienced a rapid privatization with vast and heterogeneous assets being privatized, this problem is particularly severe. The paper explores — both theoretically and empirically — tender procedures which involve a set of additional conditions to be satisfied by the winner. The aim is to provide a framework for understanding revenue inefficiencies inherent in many auctions and tenders held in Russia during transition.
    JEL: D44
    Date: 2004–07–19
  8. By: Vladimir Matveenko; Peter Saveliev
    Abstract: Recent RLMS data show that about 70 per cent of Russian citizens still have their principal employment in the so-called “old” sector of the economy, i.e. at State-owned enterprises or ones that have been privatized, but not really restructured. Typically, many Russians engage in homework and take second jobs: people spend about 30 per cent of their total working hours in the “new” sector, where hourly pay rates are 3 to 5 times higher than in their principal jobs. So why is it that there is no “exodus” of labor from the “old” sector? What are the factors maintaining a supply of labor for that sector? The study will analyze data of RLMS and a special survey planned to be conducted in St. Petersburg using an original questionnaire. The main factors maintaining labor supply in the old sector, as identified by the authors, include stable, if low, pay, social benefits, and relatively guaranteed employment. A very significant factor is the deep-rooted practice of “formal” employment, whereby people get their tiny salaries regardless of performance. So in fact, working in the “old” sector is being replaced by leisure time, work in the new sector, and homework. The situation can be described as follows: while management pretends to pay, employees pretend to work.
    JEL: J00
  9. By: Irina Tochitskaya; Ernest Aksen
    Abstract: In 1995 three countries of the former Soviet Union (Russia, Belarus and Kazakhstan) established a Customs Union, which Kyrgyzstan and Tadjikistan joined later. After the passage of five years since the Customs Union formation, it is essential to assess the implications of Belarus’ membership in this Customs Union. The objective of this project is the analysis of the costs and benefits of the Belarus’ participation in the Customs Union of the CIS countries based on the study of the static and dynamic economic effects and their impact on the nation’s welfare, and the Belarus’ economy growth rate. As the evaluations of Belarus’ participation in the Customs Union by the country’s government and political opposition are completely opposite, a politically independent analysis is of principal importance.
    JEL: F00
    Date: 2004–07–19
  10. By: Aleksandr Abolmassov; Denis Kolodin
    Abstract: The structure of the electricity market in Russia is analyzed. The findings of this project will help to evaluate different scenaria of structural changes in terms of electricity price and market concentration.
    JEL: D4 L43 L51 L94 Q48
    Date: 2003–04–03
  11. By: Irina Bezlepkina
    Abstract: This project analyzes whether Russian farms operate under liquidity constraints or under soft budget constraints. A production function that utilizes the concept of total factor productivity will be used. Incorporation of financial variables in the production function will allow analyzing their effects on farm output and suggest agricultural policy implications.
    JEL: Q00
    Date: 2003–04–03
  12. By: Georgy Kolodyazhny; Alexey Medvedev
    Abstract: The project will focus on the microstructure of Russian stock market. The main question to be asked: is there any fundamental information in the market? In order to answer this question we will carry out a study of investor behavior in the leading organized exchange (MICEX) and the determinants of investors’ successes.
    JEL: G00 G14
    Date: 2003–07–19
  13. By: Valentina Lapo
    Abstract: The goal of this project is the explanation of spatial distribution of investment in Russia during the transition to a market economy. The influence of agglomeration and investor expectations on investment in the real sector of the economy are analyzed. A theoretical model is constructed, which describes an increase in investment concentration. An empirical test of hypothesis is conducted. The results provide useful recommendations for regional investment policies.
    Keywords: investment, agglomeration, expectation, concentration of production, regions
    JEL: R12
    Date: 2003–04–03
  14. By: Sergey Verstyuk
    Abstract: This empirical research aims to test for the presence of opportunistic electoral business cycles in Ukraine. National and regional-level data on budget revenues and expenditures, output, unemployment rate, wages, and wage arrears (and prices, subject to the availability of data) will be employed. We will try to evaluate the magnitudes of electoral cycles, and check whether magnitude decreases with rationality of voters.
    JEL: D72 E32 E62 H71 H72
  15. By: Anna Vdovichenko; Victoria Voronina
    Abstract: This paper examines the Bank of Russia behaviour in post crisis period. Special attention is devoted to econometric modelling of monetary policy rules of various types. Standard model is modified in a number of ways and estimated with the use of alternative econometric techniques (GMM, OLS and TSLS methodology). One of the modifications is set in the form of a system of two simultaneous equations, describing dynamics of intervention on foreign currency market and sterilisation of excess liquidity by the Bank of Russia. Empirical results support preliminary assumptions made on the basis of qualitative analysis of terms and principles of monetary and exchange rate policy in 1999-2003. Thus, interest rate policy of the Central Bank has had rather adaptive format, while management of base money dynamics possessed pronounced stabilising pattern. Another major finding lie in the fact that despite officially declared priority of anti-inflation policy major efforts of the Bank of Russia were turned to the regulation of the exchange rate. There are some reasons to suggest that the Central Bank intervened in the exchange market with the aim to affect not only the smoothness of the exchange rate but also its level.
    Keywords: Russia, monetary and exchange rate policy, monetary policy rule, intervention, sterilisation
    JEL: E52
    Date: 2004–07–13
  16. By: Elizaveta Shevyakhova; Oleg Rytchkov
    Abstract: In this paper we suggest to use a 'new economic geography' paradigm for explanation of regional reallocation of industrial employment in Russia in 1985-1999. We construct a new economic geography" type model adjusted to specific features of Russian economy. This model gives a counterfactual distribution of industry across regions and allows us to construct a theoretical factor NEGF which is supposed to predict real changes in allocation of industrial employment. Our analysis of empirical data shows that NEGF indeed has a predictive power and this result is valid for a sufficiently wide range of model specifications.
    Keywords: Russia, new economic geography, industry allocation
    JEL: R11 R12
    Date: 2004–07–13
  17. By: Sergey Afontsev
    Abstract: When designing a trade policy reform, government of a transition country faces the problem of minimizing both trade distortions and losses in tariff revenues. One possible solution of this problem is tariff unification, which undermines stimuli for tariff evasion and thus saves budget revenues. We use Grossman-Helpman (1994) model of tariff formation extended for the case of asymmetric information to analyze a political economy basis of tariff unification in Russia (2000-2001) and prospects of further tariff unification during the WTO accession process.
    Keywords: Russia, political economy, endogenous protection theory, tariff regulation, policy formation in transition economy, trade policy
    JEL: F13 F14 P26 P33
    Date: 2004–10–05
  18. By: Alexander Varshavsky
    Abstract: This project will focus on creating an aggregate model for analyzing processes of inflation and stabilization of the Russian economy based on monthly statistical data anaysis. This includes specification of linear and nonlinear multifactor and lag equations, choosing adequate factors, estimation of parameters, and adjustment of the model. The author will also investigate the model’s response to different shocks and make recommendations for stabilizing the Russian economy.
    Date: 1999–04–05
  19. By: Olga Kuzina; Yana Roshchina
    Abstract: The project will provide a comparative analysis of financial behavior of households in Russia in the mid-90's. The data is collected from the authors' own surveys conducted in four regions of Russia. The project will evaluate parameters of regression models and construct typologies of financial behavior, with particular attention being paid to the household saving strategies.
    Date: 2000–04–05
  20. By: Victor Chetverikov
    Abstract: The authors apply the single-index Sharp model and construct the effective Markowitz set for the most liquid stocks of Russian companies listed in the Russian Trading System. Their stability during 1996-98 is studied for various investment horizons.
    Date: 2000–04–05
  21. By: Igor Korel; Liudmila Korel
    Abstract: The project centers on the effect of macroeconomics factors on inter-regional migration in Russian, using regression analysis and discriminant analysis. The motivation focuses on understanding migration in order to choose appropriate policies to influence it. The key question is whether the emerging pattern of migration provides evidence that a pro-market (labor market) mechanism is emerging. The authors hope to differentiate market-motivated migration from "catastrophic" migration such as flight from Chechnya or emigration after the Sakhalin earthquake.
    Date: 2000–04–05
  22. By: Ekaterina Gnedenko; Zoya Gorbunova; Georgy Safonov
    Abstract: The project is devoted to investigation of the households’ perception of the ecological health risk using the example of the drinking water consumption. The authors estimate the households’ willingness-to-pay for improvement of drinking water quality. In addition, they analyze the possibilities of using the households’ resources as an alternative source for financing the ecological health risk reduction in Transition.
    Date: 2000–04–05
  23. By: Yury Andrienko
    Abstract: What were the causes of the criminal waves that have accompanied the transition in Russia during the 90s? The usual suspects are poverty, income inequality, unemployment, in particular among young people, excessive alcohol consumption, inconsistency in reform and the inability of the authorities to combat crime. Based on data for 77 Russian regions, this econometric study focuses on the different socio-economic, demographic and other indicators in order to identify the major determinants of crime.
    Date: 2002–04–05
  24. By: Igor Eremenko; Katerina Lisenkova
    Abstract: The goal of our research is to study Ukraine's accession to the WTO referring to one particular sector discussed most hotly in this context: metallurgy. Ukrainian metallurgy has two remarkable features: from one side, steel producers receive substantial subsidies; from the other side, Ukrainian metallurgical exports have been permanently brought under antidumping investigations. The purpose of this research is to study effects of both cases and find impact on metallurgy and total welfare. The results of partial equilibrium model shows that on balance the total gains for the Ukrainian economy are calculated to be above USD 343 million, or 1.1 % of GDP; hence, in the subsidies-antidumping duel there is no trade-off for Ukrainian economy.
    Keywords: Ukraine, WTO, antidumping, subsidization, metallurgy
    JEL: F13 F14 L61 H21 H25
    Date: 2004
  25. By: Yuka Takeda (Faculty of Economics, University of Tokyo)
    Abstract: This paper analyzes poverty dynamics (flows into and out of poverty) in rural and urban areas in Russia during the 1990s, using the panel data of the RLMS and the aggregated data of the official household surveys. The study identifies the differences among the rural and urban poor. The results of the analysis indicate that the urban poverty is inclined to transient poverty, while the rural poverty is inclined to longer-term poverty. In contrast to the urban poverty, the rural poverty is related not only to the working poor, but also to hidden unemployment and unskilled jobs. The paper concludes that the rural poverty results from lack of the industries that could afford rural residents more opportunities to keep or improve their living standards. Although economic growth is crucial for the alleviation of the poverty in Russia, it is more effective in reducing not the rural poverty, but the urban poverty, i.e. the transient poverty.
    Date: 2004–12

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