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Are Oligarchs Productive? Theory and Evidence

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Author Info
Yuriy Gorodnichenko (University of Michigan)
Yegor Grygorenko (Citigroup Russia)

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Abstract

This paper develops a partial equilibrium model to account for stylized facts about the behavior of oligarchs, politically and economically strong conglomerates in transition and developing countries. The model predicts that oligarchs are more likely than other owners to invest in productivity enhancing projects and to vertically integrate firms to capture the gains from possible synergies and, thus, oligarchs can be socially beneficial. Using a unique dataset comprising almost 2,000 Ukrainian open joint stock companies, the paper tests empirical implications of the model. In contrast to commonly held views, econometric results suggest that, after controlling for endogeneity of ownership, oligarchs tend to improve the performance of the firms they own relative to other firms.

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Paper provided by EconWPA in its series Development and Comp Systems with number 0512013.

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Length: 42 pages
Date of creation: 15 Dec 2005
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Handle: RePEc:wpa:wuwpdc:0512013

Note: Type of Document - pdf; pages: 42
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Web page: http://129.3.20.41

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Related research
Keywords: Oligarch; transition; firm performance; property rights; treatment effect;

Other versions of this item:

Find related papers by JEL classification:
C21 - Mathematical and Quantitative Methods - - Single Equation Models; Single Variables - - - Cross-Sectional Models; Spatial Models; Treatment Effect Models
C25 - Mathematical and Quantitative Methods - - Single Equation Models; Single Variables - - - Discrete Regression and Qualitative Choice Models
D24 - Microeconomics - - Production and Organizations - - - Production; Capital and Total Factor Productivity; Capacity
O17 - Economic Development, Technological Change, and Growth - - Economic Development - - - Formal and Informal Sectors; Shadow Economy; Institutional Arrangements
P26 - Economic Systems - - Socialist Systems and Transition Economies - - - Political Economy
P31 - Economic Systems - - Socialist Institutions and Their Transitions - - - Socialist Enterprises and Their Transitions

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References listed on IDEAS
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Full references

Cited by:
(explanations, Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.)

  1. Guriev, Sergei & Rachinsky, Andrei, 2006. "The Evolution of Personal Wealth in the Former Soviet Union and Central and Eastern Europe," Working Papers RP2006/120, World Institute for Development Economic Research (UNU-WIDER). [Downloadable!]
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