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A “de Soto Effect” in Industry? Evidence from the Russian Federation


  • Alexei Karas

    (Social Science Department, Roosevelt Academy, Middleburg, Netherlands)

  • William Pyle

    () (Economics Department, Middlebury College, Middlebury, VT 05753,)

  • Koen Schoors

    (Department of Economics, Ghent University, Ghent, Belgium and Bank of Finland, BOFIT)


The empirical literature assessing the connection between land rights, access to finance and investment activity has focused largely on actors that, for multiple reasons, might face difficulties accessing credit. Communities of small-scale farmers or poor urban households in developing countries, that is, may not be the best place to look for evidence as to whether more secure land rights are sufficient to facilitate borrowing by providing borrowers with a collateralizable asset. We explore this relationship in a setting in which financial market frictions are apt to be less severe – i.e., among large, urban, industrial enterprises. Exploiting policy-induced variation across Russian regions, we use recently-collected survey data to show that private rights to land do indeed facilitate access to external financing and promote investment. This finding is supplemented by additional survey evidence that points to private land serving as an important source of collateral.

Suggested Citation

  • Alexei Karas & William Pyle & Koen Schoors, 2012. "A “de Soto Effect” in Industry? Evidence from the Russian Federation," HSE Working papers WP BRP 19/EC/2012, National Research University Higher School of Economics.
  • Handle: RePEc:hig:wpaper:19/ec/2012

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    References listed on IDEAS

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    13. J. David Brown & John S. Earle & Almos Telegdy, "undated". "The Productivity Effects of Privatization: Longitudnal Estimates for Hungary, romania, Russia, and Ukraine," Upjohn Working Papers and Journal Articles jse20063, W.E. Upjohn Institute for Employment Research.
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    Cited by:

    1. 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.

    More about this item


    industrial land; property rights; Russia; collateral;

    JEL classification:

    • P25 - Economic Systems - - Socialist Systems and Transition Economies - - - Urban, Rural, and Regional Economics
    • P31 - Economic Systems - - Socialist Institutions and Their Transitions - - - Socialist Enterprises and Their Transitions
    • 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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