nep-cis New Economics Papers
on Confederation of Independent States
Issue of 2018‒06‒18
eleven papers chosen by

  1. Дефицит бюджета и структурный профицит ликвидности как ключевые факторы развития финансового сектора России в 2018-2020 годах By Andreyev, Mikhail
  2. Conquering the box office: Factors influencing success of international movies in Russia By Gaenssle, Sophia; Budzinski, Oliver; Astakhova, Daria
  3. Efficiency in BRICS Currency Markets using Long-Spans of Data: Evidence from Model-Free Tests of Directional Predictability By Rangan Gupta; Vasilios Plakandaras
  4. Increase the Effectiveness of Reforming the Infrastructure of the Megalopolis by Introducing Modern Transport Interchange Hubs By Ivankina, Elena
  5. Institutional Factors of Improving the Organizational Structure of Russian Holding Corporations By Zdanov, Dmitriy; Gumilevskaya, Olga; Pakhomova, Galina
  6. Robust analysis of convergence in per capita GDP in BRICS economies By Phiri, Andrew
  7. Model Risk in the Valuation of Shares by the Multiplier Method By Minasyan, Vigen B.; Ivko, Daria
  8. Financialisation, distribution & the macroeconomic regimes before & after the crisis: A post-Keynesian view on Denmark, Estonia & Latvia By Dünhaupt, Petra; Hein, Eckhard
  9. Tobacco spending in Georgia: Machine learning approach By Maksym Obrizan; Karine Torosyan; Norberto Pignatti
  10. Firm competitiveness and regional disparities in Georgia By Rodríguez-Pose, Andrés; Hardy, Daniel
  11. Georgia; Technical Assistance Report-Enhancing the Fiscal Rules By International Monetary Fund

  1. By: Andreyev, Mikhail
    Abstract: In our opinion, the key problems that will determine the parameters of the financial sector in the coming years are the budget deficit and growth of the monetary base. Growth of the monetary base is a direct consequence of the budget deficit. The government can withdraw liquidity through the sale of foreign currency by the Bank of Russia, through the borrowing in the domestic money market by the Ministry of Finance or through the spending of the Russian National Wealth Fund with the simultaneous sale of these funds in the foreign exchange market. According to scenarios concerned, the development of the financial sector will depend on how the government will restrain the growth of the monetary base and how fast the government will reduce the budget deficit. We present a forecast for the Russian financial sector for 2018-2020. The forecast includes quarter series for the sector of commercial banks, the Bank of Russia and the Ministry of Finance. We used the financial balances methodology. The main external variables of the forecast were the macroeconomic variables of socio-economic development forecast, published by the Ministry of Economic Development, as well as the budget deficit parameters. In this regard, our forecast gives an answer to the question “under what parameters of financial policy can the socio-economic forecast be realized?”
    Keywords: financial sector, forecast, financial balance, cash flows, liquidity surplus, budget deficit, demand for money, liquidity absorption
    JEL: E47 E51 E58
    Date: 2018–04–12
  2. By: Gaenssle, Sophia; Budzinski, Oliver; Astakhova, Daria
    Abstract: This paper empirically examines various factors influencing box office success of international movies in Russia between 2012 and 2016. Three groups of success factors are distinguished: distribution related (e.g. budget, franchise), brand and star effects (e.g. top actors or directors), and information sources (e.g. critics and audience rating). We extend the literature by applying novel concepts such as Google-hits as indicator for electronic word of mouth. Moreover, we add novel region-specific variables like seasonality, time span between the world and local release, attendance of international stars at Russian movie premieres and title adaptation into the Russian language. The results indicate that budget, franchise, electronic word of mouth through the internet and audience ratings exert a significantly positive influence on Russian box office success. Whereas, we find no evidence of star effects in our sample and significantly negative effects for international critics, and, interestingly, the adaption of movie titles
    Keywords: motion picture economics,movies,entertainment,box office success,Russia
    JEL: L10 L82
    Date: 2018
  3. By: Rangan Gupta (Department of Economics, University of Pretoria, Pretoria, South Africa); Vasilios Plakandaras (Department of Economics, Democritus University of Thrace, Greece)
    Abstract: In this paper, we analyze the directional predictability in foreign exchange markets of Brazil, Russia, India, China and South Africa (i.e., the BRICS) using the quantilogram, which in turn, is a model-free econometric procedure involving a simple diagnostic statistic based on a sample correlation. Our analysis uses the longest possible available monthly data set covering the periods of 1812M01-2018M05, 1814M01-2018M05, 1822M07-2018M05, 1948M08-2018M05, and 1844M01-2018M05, respectively for the dollar-based exchange rates of the BRICS countries. We find that, barring the extreme phases of the currency markets, and around the median for India and South Africa, we do observe directional predictability, i.e., the efficient market hypothesis (EMH) is only accepted at these quantiles. The fact that predictability holds at certain parts of the unconditional distribution of exchange rate returns, capturing stages of the currency market, tend to support the so-called Adaptive Market Hypothesis (AMH).
    Keywords: Correlogram, dependence, quantiles, efficiency, currency markets, BRICS
    JEL: C12 C13 C14 C22 F31 G14
    Date: 2018–06
  4. By: Ivankina, Elena (Russian Presidential Academy of National Economy and Public Administration (RANEPA))
    Abstract: The work is devoted to one of the most acute problems of large cities of Russia - the transport system of a metropolis. Modern large cities are developing at such a rapid pace that their transport infrastructure does not have time to develop and transform at the same pace in accordance with the growing number of residents and jobs created in the city and the nearest suburbs. One of the ways to solve this problem is to develop a rational structure and technology for the functioning of Transport Interchange Hubs
    Date: 2018–05
  5. By: Zdanov, Dmitriy (Russian Presidential Academy of National Economy and Public Administration (RANEPA)); Gumilevskaya, Olga (Russian Presidential Academy of National Economy and Public Administration (RANEPA)); Pakhomova, Galina (Russian Presidential Academy of National Economy and Public Administration (RANEPA))
    Abstract: The paper shows the mechanisms of the influence of the weak-rational preferences of the dominant owners on the design of the organizational structure of industrial holding corporations and on the composition of its production assets. On this basis, recommendations have been made to improve the organizational structure of domestic holding corporations. In conclusion, the contractual relations in modern domestic companies, their influence on the construction of companies are examined.
    Date: 2018–05
  6. By: Phiri, Andrew
    Abstract: Whilst the issue of whether or not per capita GDP adheres to the convergence theory continues to draw increasing attention within the academic paradigm, with very little consensus having been reached in the literature thus far. Our study contributes to the literature by examining the stationarity of per capita GDP for BRICS countries using annual data collected between 1971 and 2015. Considering that our sample covers a period underlying a number of crisis and structural breaks within and amongst the BRICS countries, we rely on a robust nonlinear unit root testing procedure which captures a series of unobserved structural breaks. Our results confirm on Brazil and China being the only two BRICS economies who present the most convincing evidence of per capita GDP converging back to it’s natural equilibrium after an economic shock, whilst Russia and South Africa provide less convincing evidence of convergence dynamics in the time series and India having the weakest convergence properties.
    Keywords: Per capita GDP; Convergence; unit root tests; nonlinearities; structural breaks; BRICS Emerging economies
    JEL: C12 C13 C21 C22 C51 C52 O47
    Date: 2018–05–22
  7. By: Minasyan, Vigen B. (Russian Presidential Academy of National Economy and Public Administration (RANEPA)); Ivko, Daria (Russian Presidential Academy of National Economy and Public Administration (RANEPA))
    Abstract: This paper considers the problem of applying the method of market multipliers in assessing the value of companies in eight major industries of the Russian Federation, possibility and correctness of application of multipliers of analogical companies, advantages and disadvantages of the method. The volatility of price multipliers (P/E, P/B) is estimated. The existence of a link between the volatility of stock prices and the volatility of price multipliers (P / E, P / B) is revealed, the strength and direction of these links are analyzed. Based on the results of the study, the possibility and correctness of using multiples of analogical companies in estimating the value of Russian companies is given.
    Date: 2018–05
  8. By: Dünhaupt, Petra; Hein, Eckhard
    Abstract: Since the early 1980s, financialisation has become an increasingly important trend in developed capitalist countries, with different beginnings, speed and intensities in different countries. Rising inequality has been a major feature of this trend. Shares of wages in national income have declined and personal income inequality has increased. Against this background unsustainable demand and growth regimes have developed and dominated the major economies before the crisis: the "debt-led private demand boom" and the "export-led mercantilist" regime. The current paper applies this post-Keynesian approach on the macroeconomics of finance-dominated capitalism to three Baltic Sea countries, Denmark, Estonia and Latvia, both for the pre-crisis and the post-crisis period. First, the macroeconomics of finance-dominated capitalism are briefly reiterated. Second, the financialisation-distribution nexus is examined for the three countries. Third, macroeconomic demand and growth regimes are analysed, both before and after the crisis.
    Keywords: finance-dominated capitalism,financialisation,distribution,financial and economic crisis,Kaleckian theory of distribution
    JEL: D31 D33 D43 F40 F43 G01
    Date: 2018
  9. By: Maksym Obrizan (Kyiv School of Economics); Karine Torosyan (International School of Economics at TSU); Norberto Pignatti (International School of Economics at TSU)
    Abstract: The purpose of this study is to analyze tobacco spending in Georgia using various machine learning methods applied to a sample of 10,757 households from Integrated Household Survey collected by GeoStat in 2016. Previous research has shown that smoking is the leading cause of death for 35-69 year olds. In addition, tobacco expenditures may constitute as much as 17% of the household budget. Five different algorithms (ordinary least squares, random forest, two gradient boosting methods and deep learning) were applied to 8,173 households (or 76.0%) in the train set. Out-of-sample predictions were then obtained for 2,584 remaining households in the test set. Under the default settings random forest algorithm showed the best performance with more than 10% improvement in terms of root-mean-square error (RMSE). Improved accuracy and availability of machine learning tools in R calls for active use of these methods by policy makers and scientists in health economics, public health and related fields.
    Keywords: Tobacco Spending, Household Survey, Georgia, Machine Learning
    JEL: I12 L66 D12
    Date: 2018–05
  10. By: Rodríguez-Pose, Andrés; Hardy, Daniel
    Abstract: There are many challenges to building firm competitiveness in posttransition economies, particularly with the intensification of as global trade integration. Intranation variations in firm competitiveness are also stark, highlighting the need for policies to overcome the legacy of pretransition economic structures. Utilizing data from Georgia's annual firm census and household surveys, this paper analyzes the nature of the country's competitive landscape—measured as labor productivity—over the period 2006–2012. The results of our empirical estimations reveal that although a large proportion of a firm's competitiveness is associated with its own characteristics (sorting and compositional effects), location-specific factors are also highly relevant. In particular, the extent of agglomeration, human capital endowments, and local expenditures—such as transport infrastructure investments—play a significant role in conditioning firm-level competitiveness. Given current regional endowments, these findings highlight the significant attention that needs to be paid to building capacities in less-favored areas, not only to ensure that trade integration does not harm Georgia's less-favored regions, but also to make further progress in developing the country's private sector and fully maximize the export potential across its full stock of enterprises.
    Keywords: competitiveness; productivity; firms; Georgia transition economies
    JEL: N0 R14 J01
    Date: 2017–04–01
  11. By: International Monetary Fund
    Abstract: Georgia has legislated numerical fiscal rules for the main fiscal aggregates. The Economic Liberty Act (ELA), which was adopted in 2011 and came into force in 2014, defines numerical upper limits for the state debt (60 percent of GDP), the budget balance (3 percent of GDP), and expenditures (30 percent of GDP). While the debt and budget balance rules (BBRs) have been adhered to since their introduction, expenditures have exceeded the legislative limit, albeit by a small margin. Previous IMF technical assistance (TA) identified several issues in the application of the fiscal rules. A Fiscal Transparency Evaluation (FTE), conducted by the Fiscal Affairs Department in late 2016, found some gaps in reporting of general government revenue and expenditures against the standards set out in the IMF’s Government Finance Statistics Manual 2014 (GFSM2014) as well as gaps in the assessment and reporting on compliance with the fiscal rules. The FTE recommended a review of the fiscal rules framework, and this report summarizes the findings and recommendations of this review.
    Date: 2018–06–01

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