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Costs and Benefits of Land Ownership: The Case of Russian Firms

Author

Listed:
  • Paul Castaneda Dower

    (Florida International University)

  • Egor Malkov

    (University of Minnesota)

  • Leonid Polishchuk

    (National Research University Higher School of Economics)

  • William Pyle

    (Middlebury College)

Abstract

Private ownership confers numerous benefits, including stronger performance incentives, better use of privately owned assets, and improved access to finance. We argue that privately owned land could be both an asset and a liability, and overall net benefits of land ownership are contingent on the quality of surrounding institutions. We present a simple model and empirical evidence based on the Business Environment and Enterprise Performance Survey (BEEPS) in Russia, which clearly demonstrates such conditionality in the case of land ownership by Russian industrial firms. Consistently with earlier literature, land ownership facilitates firms’ access to finance (the “de Soto effect”), but at the same time entails additional risks and obstacles to doing business. When the quality of property rights protection and other key institutions is poor, land ownership could have an adverse effect on firms’ performance

Suggested Citation

  • Paul Castaneda Dower & Egor Malkov & Leonid Polishchuk & William Pyle, 2015. "Costs and Benefits of Land Ownership: The Case of Russian Firms," HSE Working papers WP BRP 107/EC/2015, National Research University Higher School of Economics.
    • Handle: RePEc:hig:wpaper:107/ec/2015
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    File URL: http://www.hse.ru/data/2015/11/05/1078880381/107EC2015.pdf
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    References listed on IDEAS

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    Cited by:

    1. Castañeda Dower, Paul & Pyle, William, 2019. "Land rights, rental markets and the post-socialist cityscape," Journal of Comparative Economics, Elsevier, vol. 47(4), pages 962-974.

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    More about this item

    Keywords

    de Soto effect; land ownership; property rights; privatization; institutional complementarity;
    All these keywords.

    JEL classification:

    • D23 - Microeconomics - - Production and Organizations - - - Organizational Behavior; Transaction Costs; Property Rights
    • O17 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Formal and Informal Sectors; Shadow Economy; Institutional Arrangements
    • Q15 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Agriculture - - - Land Ownership and Tenure; Land Reform; Land Use; Irrigation; Agriculture and Environment
    • R14 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - General Regional Economics - - - Land Use Patterns
    • R52 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - Regional Government Analysis - - - Land Use and Other Regulations

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