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Firm behavior under production uncertainty: Evidence from Russia

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Author Info
Leppänen, Simo () (BOFIT)
Solanko, Laura () (BOFIT)
Linden, Mikael (BOFIT)
Abstract

Enterprises in post-socialist and transition economies often participate in providing infrastructure and social services to the surrounding community. We argue that this bundling of social and infrastructure goods provision with an enterprise’s core operations is a fully rational choice in an uncertain environment. Using a stylized model, we show that this activity can be largely related to efforts by firms to increase their operational reliability. Our unique survey data suggest that this manifests itself through provision of more reliable infrastructure, stronger employee attachment to the firm, and better relations with the authorities.

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File URL: http://www.suomenpankki.fi/NR/rdonlyres/6B5B324C-8C57-49AC-AE22-21AEFA744B7F/0/DP1609.pdf
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Publisher Info
Paper provided by Bank of Finland, Institute for Economies in Transition in its series BOFIT Discussion Papers with number 16/2009.

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Length: 32 pages
Date of creation: 21 Oct 2009
Date of revision:
Handle: RePEc:hhs:bofitp:2009_016

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Postal: Bank of Finland, BOFIT, P.O. Box 160, FI-00101 Helsinki, Finland
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Related research
Keywords: uncertainty; enterprise performance; Russia;

Find related papers by JEL classification:
P30 - Economic Systems - - Socialist Institutions and Their Transitions - - - General

This paper has been announced in the following NEP Reports:

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This page was last updated on 2009-11-27.


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