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Industry specifics of liquidity dependence in Russia and vulnerability to financial shocks

Author

Listed:
  • Alexey Ponomarenko

    (Bank of Russia, Russian Federation)

  • Svetlana Popova

    (Bank of Russia, Russian Federation)

  • Sergey Sabodash

    (Bank of Russia, Russian Federation)

Abstract

Industries that require large working capital as compared to revenue are, in general, more sensitive to changes in debt financing availability. It makes such industries more vulnerable to financial crises when opportunities to attract debt financing usually become much scarcer. In Russia, the number of such industries is large, and they are more important to the economy than in Europe. Construction, real estate operations, agriculture and certain manufacturing industries, among others, are, perhaps, the most vulnerable to financial turmoil. For this reason, financial shocks can affect the Russian economy to a greater extent than that of the European countries. Therefore, maintaining financial stability requires particularly close monitoring and analysis of the situation in these industries.

Suggested Citation

  • Alexey Ponomarenko & Svetlana Popova & Sergey Sabodash, 2018. "Industry specifics of liquidity dependence in Russia and vulnerability to financial shocks," Bank of Russia Working Paper Series note18, Bank of Russia.
    • Handle: RePEc:bkr:wpaper:note18
    as

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    References listed on IDEAS

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