IDEAS home Printed from https://ideas.repec.org/p/hig/wpaper/107-ec-2015.html
   My bibliography  Save this paper

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
    as

    Download full text from publisher

    File URL: http://www.hse.ru/data/2015/11/05/1078880381/107EC2015.pdf
    Download Restriction: no

    References listed on IDEAS

    as
    1. Murphy, Kevin M & Shleifer, Andrei & Vishny, Robert W, 1993. "Why Is Rent-Seeking So Costly to Growth?," American Economic Review, American Economic Association, vol. 83(2), pages 409-414, May.
    2. Michael R. Carter & Pedro Olinto, 2003. "Getting Institutions “Right” for Whom? Credit Constraints and the Impact of Property Rights on the Quantity and Composition of Investment," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 85(1), pages 173-186.
    3. La Porta, Rafael & Lopez-de-Silanes, Florencio & Shleifer, Andrei & Vishny, Robert, 2000. "Investor protection and corporate governance," Journal of Financial Economics, Elsevier, vol. 58(1-2), pages 3-27.
    4. Simon Johnson & John McMillan & Christopher Woodruff, 2002. "Property Rights and Finance," American Economic Review, American Economic Association, vol. 92(5), pages 1335-1356, December.
    5. Frank Place & S. E. Migot-Adholla, 1998. "The Economic Effects of Land Registration on Smallholder Farms in Kenya: Evidence from Nyeri and Kakamega Districts," Land Economics, University of Wisconsin Press, vol. 74(3), pages 360-373.
    6. Galiani, Sebastian & Schargrodsky, Ernesto, 2010. "Property rights for the poor: Effects of land titling," Journal of Public Economics, Elsevier, vol. 94(9-10), pages 700-729, October.
    7. Stiglitz, Joseph E & Weiss, Andrew, 1981. "Credit Rationing in Markets with Imperfect Information," American Economic Review, American Economic Association, vol. 71(3), pages 393-410, June.
    8. Alexei Karas & William Pyle & Koen Schoors, 2015. "A "de Soto Effect" in Industry? Evidence from the Russian Federation," Journal of Law and Economics, University of Chicago Press, vol. 58(2), pages 451-480.
    9. A. Baranov & E. Malkov & L. Polishchuk & M. Rochlitz & G. Syunyaev., 2015. "Measuring Institutions in?Russian Regions: Methodology, Sources of Data, Analysis," VOPROSY ECONOMIKI, N.P. Redaktsiya zhurnala "Voprosy Economiki", vol. 2.
    10. Daron Acemoglu & Simon Johnson, 2005. "Unbundling Institutions," Journal of Political Economy, University of Chicago Press, vol. 113(5), pages 949-995, October.
    11. R. G. Lipsey & Kelvin Lancaster, 1956. "The General Theory of Second Best," Review of Economic Studies, Oxford University Press, vol. 24(1), pages 11-32.
    12. Evgeny Yakovlev & Ekaterina Zhuravskaya, 2013. "The Unequal Enforcement Of Liberalization: Evidence From Russia'S Reform Of Business Regulation," Journal of the European Economic Association, European Economic Association, vol. 11(4), pages 808-838, August.
    13. Admati, Anat R & Pfleiderer, Paul, 2000. "Forcing Firms to Talk: Financial Disclosure Regulation and Externalities," Review of Financial Studies, Society for Financial Studies, vol. 13(3), pages 479-519.
    14. Besley, Timothy, 1995. "Property Rights and Investment Incentives: Theory and Evidence from Ghana," Journal of Political Economy, University of Chicago Press, vol. 103(5), pages 903-937, October.
    15. Timothy J. Besley & Konrad B. Burchardi & Maitreesh Ghatak, 2012. "Incentives and the De Soto Effect," The Quarterly Journal of Economics, Oxford University Press, vol. 127(1), pages 237-282.
    Full references (including those not matched with items on IDEAS)

    More about this item

    Keywords

    de Soto effect; land ownership; property rights; privatization; institutional complementarity;

    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

    NEP fields

    This paper has been announced in the following NEP Reports:

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:hig:wpaper:107/ec/2015. See general information about how to correct material in RePEc.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Shamil Abdulaev) or (Shamil Abdulaev). General contact details of provider: http://edirc.repec.org/data/hsecoru.html .

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service hosted by the Research Division of the Federal Reserve Bank of St. Louis . RePEc uses bibliographic data supplied by the respective publishers.