nep-cis New Economics Papers
on Confederation of Independent States
Issue of 2006‒09‒30
three papers chosen by
Anna Y. Borodina
Perm State University

  1. The Corporate Governance Role of the Media: Evidence from Russia By Alexander Dyck; Natalya Volchkova; Luigi Zingales
  2. Poverty Is No Crime: Measuring Poverty in Russian Regions By Irina Denisova; Marina Kartseva
  3. Risks of investing in the Russian stock market: Lessons of the first decade By Alexei Goriaev; Alexei Zabotkin

  1. By: Alexander Dyck; Natalya Volchkova; Luigi Zingales
    Abstract: We study the effect of media coverage on corporate governance by focusing on Russia in the period 1999-2002. This setting offers us three ideal conditions for such a study: plenty of corporate governance violations, no alternative mechanisms to address them, and the presence of an investment fund (the Hermitage) that actively lobbies the international press to shame companies perpetrating those violations. We find that Hermitage’s lobbying is effective in increasing the coverage of corporate governance violations in the Anglo-American press. We also find that coverage in the Anglo-American press increases the probability that a corporate governance violation is reversed. This effect is present even when we instrument coverage with an exogenous determinant, i.e. the Hermitage’s portfolio composition at the beginning of the period. The Hermitage’s strategy seems to work in part by impacting Russian companies’ reputation abroad and in part by forcing regulators into action.
    JEL: G3 O16
    Date: 2006–09
  2. By: Irina Denisova (CEFIR/New Economic School); Marina Kartseva
    Abstract: Fighting poverty is on the top of Russia’s political agenda. The scope of poverty as well as the poverty profile is still an open question, however. The question is even more open with respect to the Russian regions. One could expect that being a heterogeneous country, Russia’s regional poverty profiles are also heterogeneous. We measure poverty in Russia’s regions using absolute poverty notion, official regional subsistence levels and consumption-based approach. We also draw regional poverty profiles by identifying the factors which influence poverty rates and poverty gaps. The exercise is based on NOBUS database – a nationally and regionally (for 46 regions) representative survey of 45000 households done in April-May 2003. We find that poverty rates vary significantly – up to threefold difference - across regions. The list of factors that influence poverty rate and poverty gap in regions are similar, with variation in relative weights of the factors. The former conforms with other studies on poverty in Russia that conclude that there are no major differences in determinants of transitory or persistent poverty. Some interesting insights in regional-specific patterns of poverty are found.
    Keywords: poverty, Russian regions, poverty rate, poverty profile, NOBUS
    Date: 2005–09
  3. By: Alexei Goriaev (CEFIR/New Economic School); Alexei Zabotkin
    Abstract: The modern history of the Russian stock market has mirrored ups and downs of the country’s transition as well as swings in investor perceptions. In this paper, we describe the evolution of the Russian stock market over its first decade, with particular attention to the risk factors driving stock returns. First, we analyze the development of the institutional infrastructure and dynamics of the market’s size and liquidity measured by the number of listed and traded stocks, depositary receipts and IPOs as well as trading volume in the local stock exchanges and abroad. Then, we examine major political and economic events, which influenced the investor perceptions of the country risk and were reflected in stock prices. Finally, we carry out quantitative analysis of risk factors explaining considerable time and cross-sectional variation in Russian stock returns. We document a significant role of corporate governance, political risk, and macroeconomic risk factors, such as global equity markets performance, oil prices, and exchange rates, whose relative importance varied a lot over time.
    Keywords: financial institutions, risk factors, Russian stock market
    Date: 2006–08

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