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The impact of institutional quality on manufacturing sectors: A panel data analysis

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  • Alexeev, Michael
  • Chernyavskiy, Andrey

Abstract

We use data on Russian regions to examine the effect of institutional quality on institutionally dependent manufacturing sectors in terms of both output levels and growth rates. Unlike the existing literature on this topic, which mostly uses cross-sectional or pooled specifications for either country-level or regional data, we use panel data. This approach allows us to distinguish between short-term and long-term impacts and mitigates endogeneity concerns. As an additional contribution to the literature, we estimate the full marginal effects of institutions on manufacturing sectors with different degrees of institutional dependence. In terms of policy recommendations, our results imply that significant institutional improvements would be needed for the Russian economy to diversify away from heavy reliance on oil and natural gas.

Suggested Citation

  • Alexeev, Michael & Chernyavskiy, Andrey, 2021. "The impact of institutional quality on manufacturing sectors: A panel data analysis," Economic Systems, Elsevier, vol. 45(3).
    • Handle: RePEc:eee:ecosys:v:45:y:2021:i:3:s093936252100039x
    DOI: 10.1016/j.ecosys.2021.100891
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    2. Santosh Adhikari & Michael Alexeev, 2022. "Judicial efficiency and the comparative disadvantage of Indian manufacturing," Review of Development Economics, Wiley Blackwell, vol. 26(1), pages 375-404, February.

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    More about this item

    Keywords

    Allocation of industry; Institutional quality; Relationship specificity; Russian economy;
    All these keywords.

    JEL classification:

    • D02 - Microeconomics - - General - - - Institutions: Design, Formation, Operations, and Impact
    • O14 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Industrialization; Manufacturing and Service Industries; Choice of Technology
    • P27 - Political Economy and Comparative Economic Systems - - Socialist and Transition Economies - - - Performance and Prospects

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