nep-cis New Economics Papers
on Confederation of Independent States
Issue of 2017‒11‒26
sixteen papers chosen by

  1. A Friend Who Was Supposed to Lose: How Donald Trump Was Portrayed in the Russian Media? By Anastasia Kazun; Anton Kazun
  2. Innovation in Russia: the territorial dimension By Crescenzi, Riccardo; Jaax, Alexander
  3. Motivations for Public Service in Corrupt States: Evidence from Post-Soviet Russia By Jordan Gans-Morse; Alexander S. Kalgin; Andrei V. Klimenko; Andrei A. Yakovlev
  4. Problems and approaches in the legal regulation of the use of Bitcoin in Russia and in the world By Andrey Fedorovski; Rostislav Berlinskii; Vladislav Ashikhmin
  5. The Role of Strategic Orientations in Managing Economic Crisis: An Empirical Examination of Russian SMEs By Shirokova, Galina V.; Beliaeva, Tatiana; Gafforova, Elena
  6. The interactive effects of venture cognitive logic and performance of Russian SMEs in uncertain environment By Shirokova, Galina V.; Laskovaia, Anastasiia
  7. The Role of Strategic Entrepreneurship in Performance of Russian SMEs during the Economic Crisis By Shirokova, Galina V.; Ivvonen, Liudmila; Gafforova, Elena
  8. Liability of Foreignness as a Boundary Condition for an Entry Mode Choice: a Case of Russian Companies on German Market By Panibratov, Andrei Yu.; Ribberink, Natalia; Veselova, Anna S.; Nefedov, Konstantin S.
  9. Improvement of Planning Methods for Freight Rail Transportation to Seaport Terminals By Sakhanova, Mariia; Zyatchin, Andrey V.
  10. Subregional Assymetry in the Development of Micro-Enterprises By Serova, Liudmila S.; Churakova, Yya Yu.
  11. Measuring CSR: The Index of Fairness By Storchevoy, Maxim
  12. Showing off and Hushing up: What Do Companies Reveal about Their Impact on Emerging Markets By Petrova-Savchenko, Anastasiia A.
  13. An Interdisciplinary View on Tax Revenue Estimates and Forecasts and its Impacts on a Multilevel Public Budget System By André W. Heinemann; Hanna Kotina; Maryna Stepura
  14. Latvia Stumbling Towards Progressive Income Taxation: Episode II By Anna Pluta; Anna Zasova
  15. Lifespan dispersion in times of life expectancy fluctuation: the case of Central and Eastern Europe By Jose Manuel Aburto Flores; Alyson A. van Raalte
  16. Stochastic counterfactual analysis for the vulnerability assessment of cyber-physical attacks on electricity distribution infrastructure networks By Edward Oughton

  1. By: Anastasia Kazun (National Research University Higher School of Economics); Anton Kazun (National Research University Higher School of Economics)
    Abstract: Donald Trump and his team have often been accused of having close ties to Russia and Russians expressed much greater support for Trump than residents of other countries. This article provides the first systematic analysis of Russian media coverage of Trump's activities during and after the election campaign. It concludes, on the basis of a sentiment analysis of relevant articles and network agendas of 500 Russian magazines and 250 leading federal newspapers, that Trump's media portrayal was not necessarily positive. During the election, Trump was portrayed by the Russian media not as Russia's favorite candidate, but as Hillary Clinton's opponent and a critic of U.S. recent policies. Only for a short period after Trump's victory in the elections, did the Russian media represent him as a friend of Russia, since there was hope that the new president would lift political and economic sanctions. Trump's policies failed to meet the expectations of the Russian people, and from the beginning of 2017, media coverage of Trump has become critical, hopes for lifting of political sanctions have weakened, and public opinion about the U.S. president has turned negative
    Keywords: Media, Donald Trump, Hillary Clinton, U.S. Presidential Election, public opinion, network agenda
    JEL: D72 L82
    Date: 2017
  2. By: Crescenzi, Riccardo; Jaax, Alexander
    Abstract: The debate on Russia’s innovation performance has paid little attention to the role of geography. This paper addresses this gap by integrating an evolutionary dimension in an ‘augmented’ regional knowledge production function framework to examine the territorial dynamics of knowledge creation in Russia. The empirical analysis identifies a strong link between regional R&D expenditure and patenting performance. However, R&D appears inadequately connected to regional human capital. Conversely, Multinational Enterprises (MNEs) play a fundamental role as ‘global knowledge pipelines’. The incorporation of historical variables reveals that the Russian case is a striking example of long-term pathdependency in regional patterns of knowledge generation. Endowment with Soviet-founded science cities remains a strong predictor of current patenting. However, current innovation drivers and policies also concur to enhance (or hinder) innovation performance in all regions. The alignment of regional innovation efforts, exposure to localised knowledge flows and injections of ‘foreign’ knowledge channelled by MNEs make path-renewal and pathcreation possible, opening new windows of locational opportunity.
    Keywords: innovation; R&D; evolutionary economic geography; regions; BRICS; Russia
    JEL: O32 O33 R11 R12
    Date: 2017–08–03
  3. By: Jordan Gans-Morse (Northwestern University); Alexander S. Kalgin (National Research University Higher School of Economics); Andrei V. Klimenko (National Research University Higher School of Economics); Andrei A. Yakovlev (National Research University Higher School of Economics)
    Abstract: Throughout much of the world, corruption in the civil service undermines state capacity, impedes economic development, and saps citizens’ morale. But while its pernicious effects are widely recognized, the roots of corruption remain poorly understood. Whereas most studies on corruption’s origins focus on the incentives bureaucrats face once in office, this study contributes to a line of recently emerging research that considers the role of self-selection of citizens with a propensity for corruption into bureaucracies where corruption is known to be widespread. Drawing on a survey and experimental games conducted with students at an elite university in Moscow, Russia, we compare the attitudinal, behavioral, and demographic traits of students seeking public sector employment to the traits of their peers seeking jobs in the private sector. Contrary to studies conducted in other high-corruption contexts, such as India, we find surprising evidence that students who prefer a public sector career display lss willingness to cheat or bribe in experimental games as well as higher levels of altruism. One interpretation of these findings is that corruption in Russia results from the transformation of bureaucrats’ behavior and attitudes after entering the civil service, rather than through a process of corrupt self-selection
    Keywords: corruption, Russia, motivation, civil service, experimental games.
    JEL: D73 H83
    Date: 2017
  4. By: Andrey Fedorovski (Immanuel Kant Baltic Federal University); Rostislav Berlinskii (Immanuel Kant Baltic Federal University); Vladislav Ashikhmin (Immanuel Kant Baltic Federal University)
    Abstract: The presentation is dedicated to problems and approaches in the legal regulation of the use of one of the cryptocurrencies - Bitcoin. Currently Bitcoin causes bigger interest among the world society, which is connected, in particular, with the highly increased exchange rate of this cryptocurrency. A number of countries have already formed a well-defined position and created a legal basis for development or for a complete or partial restriction of this cryptocurrency. But at the moment the most part of the world countries do not have a legal and regulatory framework of Bitcoin. In this presentation there is an analysis identifying pros and cons of this cryptocurrency and also the consequences of its further integration into the biggest world countries. Besides, our group has considered the experience of the number of countries in which the legal regulation of this cryptocurrency is established. The research offers a way for the further legal regulation of Bitcoin in Russia.
    Keywords: Bitcoin, cryptocurrency, legal regulation, world countries
    Date: 2017–10
  5. By: Shirokova, Galina V.; Beliaeva, Tatiana; Gafforova, Elena
    Abstract: While there is a growing interest towards exploring multiple strategic orientations, most research has been conducted in stable economic environments. Taking into consideration the contemporary economic instability, it is timely to develop an understanding of strategic directions which may guide firmsÙ behaviors for managing their way through economic crises. In this study, we examine the role of entrepreneurial (EO), market (MO), and learning orientation (LO) in helping SMEs capitalize during economic crisis. Based on the dataset of 612 Russian SMEs collected in 2015-2016, the results indicate that, individually, EO and MO enable firms to capitalize during crisis times; yet, their benefits are reduced when coupling with another strategic orientation.
    Keywords: economic environment, strategic orientations, entrepreneurial orientation, market orientation, learning orientation, Russia, SMEs, economic instability,
    Date: 2016
  6. By: Shirokova, Galina V.; Laskovaia, Anastasiia
    Abstract: Nowadays firms exist in highly unstable environment. The most dramatic and substantial influence changes in external environment have on firm performance. Apart from context, managers and foundersÙ decision-making is also remain very significant root of venture success. We aim at exploring the relationship between top managersÙ venture cognitive logic and firm performance in emerging market context during economic crisis. Particular, we utilize the database of 608 Russian small and medium firms collected in 2015-2016. The results indicate that under higher levels of dynamism and heterogeneity Russian firms will benefit more from using causal logic rather than effectual.
    Keywords: effectuation, causation, firm performance, uncertainty, SMEs, Russia,
    Date: 2016
  7. By: Shirokova, Galina V.; Ivvonen, Liudmila; Gafforova, Elena
    Abstract: This study examines how components of strategic entrepreneurship relate to Russian small and medium-sized firms performance during the economic crisis and to what extent combinations of firm resources determine these relationships. In order to address these issues we surveyed 651 Russian private SMEs. Our results show that during the economic crisis exploitation is positively associated with firm performance. However, we found positive association of exploration with firm performance during the economic crisis instead of negative association. Our results also indicate that relationship between exploration as well as exploitation and firm performance is dependent on different combinations of firm resources.
    Keywords: strategic entrepreneurship, exploration, exploitation, SMEs, firm performance, economic crisis, human capital, financial capital, social capital, Russia,
    Date: 2016
  8. By: Panibratov, Andrei Yu.; Ribberink, Natalia; Veselova, Anna S.; Nefedov, Konstantin S.
    Abstract: In the paper we apply liability of foreignness (LOF) concept as a boundary condition for a choice of entry mode used by Russian companies while penetrating German market. In terms of an entry mode we differentiate between export and FDI and test how different aspects of LOF affect the choice between these two alternatives. The paper presents the results of a pilot study of 40 subsidiaries of Russian MNEs operating in different regions of Germany. Our results show that both exporter and companies who are involved in FDI experience significant negative effects from the lack of proper institutional and business knowledge about host market, though in various degrees. Legal consulting and personal market analysis are identified among effective instruments to mitigate these effects for both types of entry modes, however, cooperation with institutional agents, such as the Chamber of Commerce, is also of high value, especially, for companies involved in FDI.
    Keywords: liability of foreignness, entry mode, Russian companies, FDI, foreign direct investments, legal consulting, market analysis,
    Date: 2016
  9. By: Sakhanova, Mariia; Zyatchin, Andrey V.
    Abstract: Nowadays Russian railways make centralized decision about month loading plan for regional railroads in terms of cargo types, destination, types of rolling-stock subject to customersÙ orders. To implement centralized plan for a month regional railroads make local decision about daily loading. Such a plan should meet conditions of different nature: customersÙ needs, technological and season terms, and others. However, such a policy could lead to non-uniform delivery to a seaport. As a result it brings penalties if capacity of the port is not enough to elaborate cargo delivered. This research introduces improvements for centralized freight railroad transportation planning methods in the direction of port terminals. Theoretical result of the research is a method, based on a linear programming model. The method allows constructing such loading plan for railroad shipment to a seaport as to minimize penalties for cargo, which exceeds daily capacity of the seaport. Practical result corresponds to implementation of the method in the case of Russian railways.
    Keywords: supply chain management, operations management, Russia, railways, centralized plan,
    Date: 2016
  10. By: Serova, Liudmila S.; Churakova, Yya Yu.
    Abstract: Modern economy gives specific challenges to every business unit, but for micro enterprises impossibility to overcome them may lead to disappearance. Transition economies sufficiently increase the role of small and micro enterprises because of the ability to respond to the systemic shock and generate jobs and income at the time when the large firm sector was undergoing a rapid decline. Micro-enterprises create favorable conditions for Russian sub-regional economic growth: they develop competitive environment, enlarge consumer sector and find a better use of local raw materials. The current study combines typology task with territory potential use analysis and the main objective of the study is Russian sub-regional differences analysis in micro-enterprises population development. The purpose of this research is to examine the national business environment on a regional basis, as well as to identify factors that determine the economic viability of different regions.
    Keywords: modern economy, microenterprises, SMEs, entrepreneurship, distribution intensity, business demography, Russia, regional economy,
    Date: 2016
  11. By: Storchevoy, Maxim
    Abstract: We offer an approach for practical measuring of corporate social responsibility based on the stakeholder theory. This approach assumes that it is methodologically incorrect and technically infeasible to measure CSR on the basis of objective variables and through selfreporting procedures. A more correct and realistic method of measuring CSR should be based on a systematic survey of stakeholdersÙ opinion. The research offers a concept of Fairness Index and provides results of its first empirical testing for several Russian and European companies.
    Keywords: business ethics, corporate social responsibility, corporate social performance, stakeholder theory, objective variables, stakeholdersÙ opinion, Russia, Europe,
    Date: 2016
  12. By: Petrova-Savchenko, Anastasiia A.
    Abstract: Stakeholders have relatively limited access to sources of information about CSP effects generated by companies working on emerging markets. Non-financial reporting proved to stay the most capacious data source available and became a widespread practice. The worldÙ³ largest corporate responsibility reports directory Ó Corporate Register Ó numbers 316 reports from Brazil, 233 reports from South Africa, 111 reports from India, 53 reports from China and 59 reports from Russia as of 2015 reporting period. The information, which is disclosed to stakeholders in these reports, is not the same considering its structure, variety of KPIs and depth of disclosure. The author compares nonfinancial reports presented on five different emerging markets to find the differences and possible reasons for them.
    Keywords: corporate social performance, non-financial reporting, emerging markets, Brazil, China, Africa, reports, non-financial analysis,
    Date: 2016
  13. By: André W. Heinemann (University of Bremen); Hanna Kotina (Kyiv National Economic University); Maryna Stepura (Kyiv National Economic University)
    Abstract: While tax revenue forecasts are required for the public budget planning and execution process, the frameworks and accuracy of tax revenue forecasts are crucial for economic analysis of public budgets in multilevel systems. Insufficient and defective tax revenue forecasts can lead to budget problems as well as budget interdependencies in multilevel systems. The determination of budget revenues amount, which can actually be carried out, needs to estimate the forecast of tax revenues reasonably and accurately. Adequacy and feasibility of relevant indicators depend on the assessment of the state, trends and forecasting of economic and social development, stability and progressiveness of the current legislation, the forms and methods of tax mobilization, the level of fiscal culture and other factors. The role of tax revenue forecasting is enhanced significantly. Fiscal equalization schemes, grant systems and bailout rules have to take into account in the case of problems with the accuracy of tax revenue forecasts. If tax revenues forecasts in the medium-term are upward biased, the institutional setting can be an explanation for forecasts errors (Breuer 2014). However, over-optimistic as well as under-optimistic forecasts influence budgeting and budget targets.The present paper deals with the conditions and institutional frameworks for accuracy of tax revenue forecasts, especially in a medium-income and a high-income country. First, we present a literature review on tax revenue forecast and the importance of institutional performance for accurate tax revenue forecasts. Thereby, empirical studies to explain forecasts errors will be analyzed. In a comparison of two countries, the second session describes the institutional setting for tax revenue forecasts and the procedures in the Ukraine and Germany and shows the methods, actors and institutional mechanisms in these different multilevel systems. The analysis focusses on the degree of decentralization in both countries and legal equalization schemes. We show some determinants of tax revenue forecast errors and discuss the impacts and consequences for budgetary planning and budget managing in multilevel systems. Our findings point out the importance of fiscal governance in multilevel systems if tax revenue forecasts are influenced by many determinants in specific ways that makes revenue forecast difficult. Multilevel fiscal governance is required to solve problems in tax revenue forecasts and budgeting in decentralized systems. Additionally, the knowledge on taxpayer´s behavior (households, employees, consumer, firms) under conditions of globalization of taxation is underestimated at the present, but is needed for the improvement of public budget managing processes.
    Keywords: Tax estimates, Tax forecasts, Budget planning, Multilevel governance
    JEL: H11 H70 H77
    Date: 2017–10
  14. By: Anna Pluta (Baltic International Centre for Economic Policy Studies (BICEPS)); Anna Zasova (Baltic International Centre for Economic Policy Studies (BICEPS))
    Abstract: In August 2017, the Latvian parliament adopted a major tax reform package that will come into force in January 2018. This reform was a long-awaited step from the Latvian authorities to make the personal income tax more progressive. Some of the elements of the adopted reform, e.g. the changes in the basic tax allowance are estimated to help reducing the tax wedge on low wages and help addressing the problem of high income inequality. At the same time, the way the newly introduced progressive tax rate is designed will effectively lead to a reduction in the tax burden on labor and will hardly introduce any progressivity to the system.
    Date: 2017–11
  15. By: Jose Manuel Aburto Flores (Max Planck Institute for Demographic Research, Rostock, Germany); Alyson A. van Raalte (Max Planck Institute for Demographic Research, Rostock, Germany)
    Abstract: Central and Eastern Europe have experienced considerable instability in mortality since the 1960s. Long periods of stagnating life expectancy were followed by rapid increases in life expectancy and in some cases even more rapid declines before more recent periods of improvement. These trends have been well documented but to date, no study has comprehensively explored trends in lifespan variation. We improve such analyses by incorporating life disparity as a health indicator alongside life expectancy. We analyzed how lifespan variation has changed since the 1960s for 12 countries from the region and determined the ages which have contributed the most to the observed variability in age at death. Furthermore, we quantified the effect of mortality related to alcohol consumption on life disparity since 1994. Our results showed that life disparity was high and strongly fluctuating over the time period. Life expectancy and life disparity moved independently from one another, particularly during periods of life expectancy stagnation. Fluctuations in mortality were, to a large extent, directly or partially attributable to changes in alcohol consumption. These trends run counter to the common patterns observed in most developed countries and contribute to the life expectancy-disparity discussion by showing that expansion/compression levels do not necessarily mean lower/higher life expectancy or mortality deterioration/improvements.
    Keywords: Belarus, Bulgaria, Czech Republic, Estonia, Hungary, Latvia, Lithuania, Poland, Russian Federation, Slovakia, Slovenia, Ukraine, age at death, alcoholism, causes of death, differential mortality, inequality, life expectancy
    JEL: J1 Z0
    Date: 2017–11
  16. By: Edward Oughton (Cambridge Judge Business School, University of Cambridge)
    Abstract: In December 2015, a cyber-physical attack took place on the Ukrainian electricity distribution network. This is regarded as one of the first cyber-physical attacks on electricity infrastructure to have led to a substantial power outage and is illustrative of the increasing vulnerability of Critical National Infrastructure to this type of malicious activity. Few data points, coupled with the rapid emergence of cyber phenomena, has held back the development of resilience analytics of cyber-physical attacks, relative to many other threats. We propose to overcome data limitations by applying stochastic counterfactual analysis as part of a new vulnerability assessment framework. The methodology is developed in the context of the direct and indirect socio-economic impacts of a Ukrainian-style cyber-physical attack taking place on the electricity distribution network serving London and its surrounding regions. A key finding is that if decision-makers wish to mitigate population disruptions, then they must invest resources more-or-less equally across all substations, to prevent the scaling of a cyber-physical attack. However, there are some substations associated with higher economic value due to their support of other Critical National Infrastructures, such as airports or maritime ports, which justifies the allocation of additional cyber security investment to reduce the chance of cascading failure. Further cyber-physical vulnerability research must address the trade-offs inherent in a system made up of multiple institutions with different strategic risk mitigation objectives and metrics of value, such as governments, infrastructure operators and commercial consumers of infrastructure services.
    Date: 2017–11

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