Showing papers by "National Research University – Higher School of Economics published in 2003"

Research Joint Ventures

Abstract: Inter-firm collaboration is not new. What is new is that such collaboration has exploded during the past couple of decades, in parallel to the intensification of international competition. Moreover, the nature of collaboration has changed, shifting from peripheral interests to the very core functions of the corporation, and from equity to non-equity forms of collaboration. Importantly, cooperation focusing on the generation, exchange, and/or adaptation of new technologies has risen at very fast rates. Research joint ventures, the focus of this paper, belong in the latter category. The proliferation of RJVs has created extensive interest among economists, business analysts, and policy decision-makers and led to the profusion of literature on the topic. This paper critically reviews the literature in industrial economics and strategic management that deals with RJV partner motives and RJV outcomes. The paper categorizes the different streams of this literature and indicates the state-of-the-art, synthesizes important understandings, and suggests key nodes of a future research agenda.

Political Culture and Democracy: Analyzing Crosslevel Linkages

Abstract: Do individual-level attitudes play a significant role in sustaining democratic institutions at the societal level? In a recent article in Comparative Politics, Seligson argued that the strong aggregate-level correlations Inglehart found between political culture and stable democracy were spurious because there are no individual-level correlations between political culture and overt support for democracy. Seligson's analysis exemplifies the sort of cross-level fallacy he attributes to Inglehart: he equates individual-level support for democracy with the presence of democratic institutions. However, individual-level support of democracy is only weakly linked with societal-level democracy. Democracy currently has a positive image almost everywhere, but favorable opinions are often superficial. Unless they are accompanied by more deeply rooted orientations of tolerance, trust, and participation, chances for effective democracy are poor.

Fiscal federalism and regional growth : evidence from the Russian Federation in the 1990s

Abstract: Subnational fiscal autonomy - the basis for fiscal federalism in modern federations - is meant to serve two roles. First, local control over revenue collection is meant to provide a check on the capacity of central authorities to tax arbitrarily local capital. Second, retention of taxes raised locally is meant to establish incentives for subnational governmental authorities to foster endemic economic growth as a way of promoting local tax bases. But in the Russian Federation, fiscally autonomous regions have often resisted market-oriented reforms, the enactment of rules protecting private property, and the dismantling of price controls and barriers to trade. Desai, Freinkman, and Goldberg find statistical evidence in support of the hypothesis that fiscal incentives of the Russian regions represent an important determinant of regional economic performance. The authors also seek to understand the conditions under which fiscal autonomy prompts regional growth and recovery, and the conditions under which it has adverse economic effects. They argue that the presence of "unearned" income streams - particularly in the form of revenues from natural resource production or from budgetary transfers from the central government - has turned regions dependent on these income sources into "rentier" regions. As such, governments in these regions have used local control over revenues and expenditures to shelter certain firms (natural resource producers or loss-making enterprises) from market forces. Using new fiscal data from 80 Russian regions from 1996-99, the authors test this central hypothesis in both single- and simultaneous-equation specifications. Their results indicate that tax retention (as a proxy for fiscal autonomy) has a positive effect on the cumulative output recovery of regions since the breakup of the Soviet Union. But they also find that this effect decreases as rentable income streams to regions increase. This paper - a product of the Poverty Reduction and Economic Management Sector Unit, Europe and Central Asia Region - is part of a larger effort in the region to support fiscal reforms in transition.

Modeling proportional membership in fuzzy clustering

Abstract: To provide feedback from a cluster structure to the data from which it has been determined, we propose a framework for mining typological structures based on a fuzzy clustering model of how the data are generated from a cluster structure. To relate data entities to cluster prototypes, we assume that the observed entities share parts of the prototypes in such a way that the membership of an entity to a cluster expresses the proportion of the cluster's prototype reflected in the entity (proportional membership). In the generic version of the model, any entity may independently relate to any prototype, which is similar to the assumption underlying the fuzzy c-means criterion. The model is referred to as fuzzy clustering with proportional membership (FCPM). Several versions of the model relaxing the generic assumptions are presented and alternating minimization techniques for them are developed. The results of experimental studies of FCPM versions and the fuzzy c-means algorithm are presented and discussed, especially addressing the issues of fitting the underlying clustering model. An example is given with data in the medical field in which our approach is shown to suit better than more conventional methods.

Firms and Public Service Provision in Russia

Abstract: This paper reports first results from a survey of 404 middle-sized and large manufacturing firms from 40 Russian regions in April-June 2003. We examine the extent of social service and infrastructure provision by the firms and the firms' assessment of the quality of public infrastructure and the regulatory environment. Background information of ownership, investment, performance, competition, and finance decisions of the firms is also gathered. The data reveal that despite major divestments of social services during 1990s, a great majority of firms still provide at least some form of social services. For example, 56% of the firms have their own housing or support local housing, and 73% of the firms have recreation facilities or support employee's recreation activities. While managers view the social service provision as non-essential and costly, many of the firms continue to provide these services, even to users other than their own workforce. The quality of public infrastructure is generally assessed as being good or satisfactory; the respondents were the least satisfied with the quality of roads. Over a half of the firms provide their own heat, but mainly due to technological reasons - although public service interruptions do occur - and 24% of the firms give support to the maintenance and construction of public road network. The regulatory burden the firms face continues to be severe. In more than half of the firms, for example, the general manager has to spend more than two weeks in negotiations about public infrastructure with the authorities. These descriptive results indicate that there is still a lot scope for improvement in the quality and quantity of public service provision in Russia. Enterprises are still engaged rather heavily in social service provision, road network would require improvements, and the easing of regulatory burden should continue. Addressing these questions is likely to be vital for the sustainability of investments and growth in Russia. The paper is part of the project "Infrastructure and Welfare Services in Russia: Enterprises as Beneficiaries and Service Providers" financed by the Academy of Finland (project number 200936), the World Bank, and Yrjo Jahnsson Foundation. The project has also received support from the Bank of Finland Institute for Economies in Transition.

Wage differentials and state- private sector employment choice in Yugoslavia *

Abstract: In this study we use the newly available Yugoslavian Labor Force Survey data to investigate wage differentials and employment decisions in the state and private sectors in Yugoslavia. For the analysis we use three empirical models that rely on different statistical assumptions. We extend the standard switching regression model to allow non-normality in the joint distribution of the error terms. After correcting for the sector selection bias and controlling for workers' characteristics we find a private sector wage advantage. The wage premium is largest for workers with low education levels and declining for workers with higher educational levels. Given the regulatory and tax policies that pushed the private sector into the informal sphere of the economy during the period covered by our data, we argue that the state/private wage gap is likely to grow in the future. This will make it increasingly difficult for the state sector to attract and retain highly skilled employees.

Commitment and the Adoption of a Common Currency

Abstract: In contrast to Mundell's inquiry on the optimality of currency areas, this article aims to understand under what circumstances a Pareto-dominant monetary union will be established. Using a multicountry overlapping generations model, we highlight gains from monetary union arising from reduced transactions costs and lower inflation. Despite these gains, countries acting independently will impose barriers to exchange through local currency restrictions, thereby creating transactions costs and providing an incentive for inflation. Therefore, the gains from monetary union are most likely to be lost without collective effort.

Capture of Bankruptcy: Theory and Russian Evidence ∗

Abstract: Laws that work well in developed market economies may produce unexpected outcomes in a corrupt environment The paper argues that the Russian legal system is impaired by the capture of regional arbitration courts and analyzes the consequences of this capture for functioning of bankruptcy institution in the late 1990s A model of strategic interaction among main stakeholders generates the following results First, governors and managers of large regional enterprises colluded to use bankruptcy procedure as a mechanism of expropriation of the federal government’s revenues and claims of outside investors Second, the bankruptcy law did not put pressure on managers to restructure; instead, the law could have prevented restructuring even when managers wanted to do so Empirical analysis substantiates the theoretical findings and shows that regional political factors were important in explaining implementation of the 1998 Russia’s bankruptcy law

Debt Ownership Structure and Legal System: An International Analysis

Abstract: This paper is concerned with the ownership structure of corporate debt from an institutional perspective. We try to identify the factors affecting bank debt use from an international sample of companies from Austria, Germany, Japan, Belgium, France, Italy, Holland, Spain, Portugal, Finland, Sweden and the USA. Our results show that bank debt depends both on factors specific to each company and on institutional features of each country. More exactly, we find that bank loans are related to firm size, to the quality and risk of the projects, and to the collateral. We also find a number of legal-institutional factors impacting on the source of firms' debt, such as creditor protection, firm disclosure requirements and law enforcement.

Internet tools for supporting of lay stakeholders in the framework of the democratic paradigm of environmental decision making

Abstract: The paper describes the concept of Internet tools that may help implementing a democratic paradigm of environmental decision making, which is based on the desire to involve lay stakeholders into the process of decision making. It is clear that lay stakeholders usually have minimal knowledge on the ways how to solve environmental problems. The gap among knowledge and actions of lay stakeholders may be extremely dangerous. In this paper we propose visualization-based Internet tools that can help lay stakeholders to study the environmental problems and base their actions on a better understanding of the issues. The tools are based on multi-criteria exploration of the whole variety of possible environmental decision alternatives that helps to understand the feasibility frontiers and individual selecting several preferred feasible decision alternatives. We argue that such Internet tools can be mastered by computer-literate lay stakeholders and used by them in the process of preparation to political actions related to the final choice. Copyright © 2004 John Wiley & Sons, Ltd.

Wage differentials and state-private sector employment choice in the Federal Republic of Yugoslavia

Abstract: The authors use the newly available Yugoslavian Labor Force Survey data to investigate wage differentials and employment decisions in the state and private sectors in Yugoslavia. For the analysis the authors use three empirical models that rely on different statistical assumptions. They extend the standard switching regression model to allow non-normality in the joint distribution of the error terms. After correcting for the sector selection bias and controlling for workers' characteristics the authors find a private sector wage advantage. The wage premium is largest for workers with low education levels and declining for workers with higher educational levels. Given the regulatory and tax policies that pushed the private sector into the informal sphere of the economy during the period covered by our data, the authors argue that the state-private wage gap is likely to grow in the future. This will make it increasingly difficult for the state sector to attract and retain highly skilled employees.

Evaluating the impact of infrastructure rehabilitation projects on household welfare in rural Georgia

Abstract: The authors evaluate the effect of various community level infrastructure rehabilitation projects undertaken in rural Georgia on household well-being. Their analysis is based on combining household and community level survey data. The authors' empirical approach uses the panel structure of the data to control for time-invariant un-observables at the community level by applying propensity-score-matched double difference comparison. The results indicate that improvements in school and road infrastructure produce nontrivial welfare gains for the poor at the village and country levels. The impact of water rehabilitation projects is ambiguous. School rehabilitation projects produce the largest gains for the poor. The methodological lesson from this analysis is that ad hoc community surveys matched with ongoing nationally representative surveys can provide a feasible and low cost impact evaluation tool.

Algebras with finitely generated invariant subalgebras

Abstract: Nous classifions des algebres integres finiment engendrees munies d'une action rationnelle d'un groupe reductif connexe G avec la propriete suivante : toute sous-algebre G-invariante est finiment engendree. De plus nous obtenons quelques resultats sur les plongements affines

Demand for Law in the Sphere of Corporate Governance: Evolution of Economic Actors' Strategies

Abstract: The paper defines major groups of influential private and public actors involved in corporate governance processes in Russia. Their main incentives and interests as well as the evolution of their relations to corporate law are analyzed. On this base opportunities of applied analysis of the demand for law in the sphere of corporate governance are discussed.

An Analysis of Ratings of Russian Banks

Abstract: Since the recent financial crisis, both the Russian business community and foreign investors have started to make more and more use of ratings of the reliability of Russian banks, i.e., their ability to meet interest and repayment commitments to the investors. In response to this, the number of rating agencies has increased over the past few years. In this paper, existing ratings are analyzed and compared using ordered probit models that explain bank ratings from bank characteristics such as size indicators and financial ratios characterizing profitability, or default risk on loans given. Moreover, on the basis of a survey among financial experts, models for expert ratings are constructed and results are compared to those for the agency ratings. We find that agency and expert ratings of virtual banks are largely in line with each other, but there are also some differences. For example, liquidity measures are important for agency ratings but insignificant for the expert ratings. Moreover, we find some surprising differences between expert ratings of real banks and expert ratings of virtual banks. While overdue loans are important for the virtual banks, they play no role in either the agency ratings or the expert ratings of real banks. An explanation may be that banks manage to mask the actual number of overdue loans.

Economy Modernization and the System of Values

Abstract: The author on the example of the groups of countries (Western and Eastern Europe, Latin America and Eastern Asia) considers the connection of values and economic development. Spain has demonstrated serious advances in the system of values. The main factors are market reforms and democratization. Traditional Russian values seriously reflect relations of archaic society with agrarian-feudal economy and hierarchical structure of authorities. The Soviet system of values looked like a traditional one in many ways. In modern Russia under the influence of reforms and changes in the way of life the structure of value orientations moves more and more in the direction of liberal and productive values. As the author sees it formation of the productive system of Russian values requires time, continuation and completing of liberal institutional reforms, consecutive democratization, humanization of authorities, policy and social life.

On the canonical embeddings of certain homogeneous spaces

Abstract: We study equivariant affine embeddings of homogeneous spaces and their equivariant automorphisms. An example of a quasiaffine, but not affine, homogeneous space with finitely many equivariant automorphisms is presented. We prove the solvability of any connected group of equivariant automorphisms for an affine embedding with a fixed point and finitely many orbits. This is applied to studying the orbital decomposition for algebraic monoids and canonical embeddings of quasiaffine homogeneous spaces, i.e., those affine embeddings associated with the coordinate algebras of homogeneous spaces, provided the latter algebras are finitely generated. We pay special attention to the canonical embeddings of quotient spaces of reductive groups modulo the unipotent radicals of parabolic subgroups. For these varieties, we describe the orbital decomposition, compute the modality of the group action, and find out which of them are smooth. We also describe minimal ambient modules for these canonical embeddings provided that the acting group is simply connected.

Lipschitzian Operators of Substitution in the Algebra ΛBV

Abstract: We present necessary and sufficient conditions on the generating functions of operators of substitution (=Nemytskii superposition operators), which map the Waterman space v BV of functions of v -bounded variation on the interval into another space of this type and satisfy the Lipschitz condition.

Gender and poverty: a life cycle approach to the analysis of the differences in gender outcomes

Abstract: The authors study complex interactions between gender and poverty in postwar Bosnia and Herzegovina. The goal of their analysis is to uncover how a spectrum of gender differentials at different parts of the life cycle varies across income groups. Using the data from the 2001 Bosnia and Herzegovina Living Standards Measurement Study, the authors find strong gender-poverty interaction in the patterns of labor force participation, gender gap in earnings, individuals' school finances, and school attendance. The main source of gender inequality seems to come from differences in investments in girls' and boys' educations that increase with declines in income levels. Short-term income shocks could lead to long-term increases in gender inequality in households with school age children, unless there is ready access to credit markets. The authors also find that the magnitude of the impact of economic development on gender differences in Bosnia will depend on where the growth is concentrated. If the poor capture at least some benefits of economic growth, the gender differences in household investment in human capital of their children will decline. If, on the other hand, growth is concentrated among the richest, then important gender disparities could remain pervasive.

The Sources of Economic Growth in Ukraine after 1998 Currency Crisis and the Country's Prospects

Abstract: The purpose of this study is to analyze the sources of economic growth in Ukraine, which has been observed from the second half of 1999. In addition, we intend to answer the question what is the sustainability of this growth, i.e. putting in other words, what are the chances and conditions for maintaining growth in the future. Neither question is easy to answer. Analyzing sources of growth and growth sustainability in any transition country is a serious intellectual challenge, for a number of reasons. First, we do not have any comprehensive growth theory in transition economies so far. What is available, it is a couple of more or less empirically verified hypotheses concerning the influence of various macro and microeconomic factors on growth performance. Second, statistical data series in transition economies are still rather short and unstable as a result of various methodological changes in statistics and structural and institutional changes in the economy, which makes serious econometric analysis risky. This argument is particularly relevant to the Ukrainian economy, which entered structural and institutional changes with significant delay compared to other countries, and where the quality of statistics is below regional average. Third, most of transition economies, including the Ukrainian one, are open in terms of trade and financial flows. They have thus become sensitive to some external factors such as growth fluctuations in the world economy as a whole, varying conditions of Ukraine’s major trade partners, changing attitudes of financial investors to emerging markets, etc. We have seen that even countries considered as having strong and sustainable growth potential can seriously suffer from adverse external shocks as it happened in 1998-1999 with the Baltic countries and Poland after the Russian and Ukrainian financial crises.

Structural Maneuver and Economic Growth

Abstract: The article proposes the realization of structural reforms in the Russian economy. The author points out three sectors of the modern economy: the export sector, mainly energy and raw materials; the sector oriented at domestic market; the non-market sector, which includes, besides budgetary sphere, electricity production, gas industry and utilities. The idea is to considerably limit the size of the non-market sector at the expense of the said industries and broaden in them the sphere of competitive relations, leveling relative prices and hence creating additional stimuli to modernization of the economy.

Spaces of Hermitian operators with simple spectra and their finite-order cohomology

Abstract: V. I. Arnold [3] studied the topology of spaces of Hermitian operators in C with non-simple spectra in a relation with the theory of adiabatic connections and the quantum Hall effect. The natural filtration of these spaces by the sets of operators with fixed numbers of eigenvalues defines the spectral sequence, providing interesting combinatorial and homological information on this stratification. We construct a different spectral sequence, also counting the homology groups of these spaces and based on the universal techniques of topological order complexes and conical resolutions of algebraic varieties, generalizing the combinatorial inclusion-exclusion formula and similar to the construction of finite-order knot invariants. This spectral sequence degenerates at the term E1, is (conjecturally) multiplicative, and as n grows then it converges to a stable spectral sequence counting the cohomology of the space of infinite Hermitian operators without multiple eigenvalues, all whose terms E r are finitely generated. It allows us to define the finite-order cohomology classes of this space, and to apply the well-known facts and methods of the topological theory of flag manifolds to the problems of geometrical combinatorics, especially concerning the continuous partially ordered sets of subspaces and flags.

Comment intégrer l'économie comparative dans l'économie ?

Abstract: Le texte propose une analyse comparee des programmes de recherche influents dans le domaine de l'economie comparative, ainsi qu'une evaluation de leur role effectif et potentiel pour la boite a outils de l'economiste. L'analyse porte sur les programmes qui sont explicitement ou implicitement comparatifs. Le premier groupe inclut l'approche traditionnelle des Systemes economiques compares (particulierement dans les versions de T. Koopmans-J. Montias et E. Neuberger-W. Duffy) et la recente Analyse institutionnelle comparative de A. Greif et M. Aoki. Le second groupe est represente par YOrdoliberalisme allemand qu'inaugura W. Eucken et le programme de recherche francais plus recent de la Theorie de la regulation. L'economie comparative est analysee dans la perspective de la grande antinomie d'Eucken, avec les controverses qu'elle implique sur la nature de la connaissance economique. Le defi remonte a la querelle des methodes de la fin du XIXe siecle mais une reponse adequate a ce defi demeure a l'ordre du jour. L'essentiel de la theorie economique moderne depend fortement de la clause ceteris paribus. Pour attenuer cette dependance, les economistes devraient prendre au serieux la strategie de recherche comparative. L'analyse methodologique du domaine de l'economie comparative souligne certains fondements episte- mologiques essentiels mais negliges (particulierement le role heuristique des constructions idealty piques) et montre que l'economie comparative constitue un moyen indispensable pour reduire le fosse entre la recherche empirique et theorique, de meme qu'entre la science et Y art de l'economie.

Time allocation of Russian CEOs

Abstract: Through the survey of530 Russian CEOs of industrial companies, we were able to receive the self reported evidence on overall working load and time distribution of Russian executives. The data suggests that Russian CEOs exhibit the patterns of time management, familiar to Western managers 20-30 years ago: hard overload, minimal work from home, passion to visit the shop floor. Although the personal differences in allocation of time among various tasks were significant, no particular management style proved to be more effective in terms of company's performance. This means that foreign partners should not judge a priori about the efficiency of their Russian counterparts based on unfamiliar peculiarities of time management.