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

Author

Listed:
  • Michael Alexeev

    (Indiana University, Bloomington, Indiana and the Russian Academy of National Economy and Public Administration (RANEPA), Moscow, Russia)

  • Andrey Chernyavskiy

    (National Research University Higher School of Economics, (HSE) University of Moscow, Russia)

Abstract

We use the 2005-2012 data for Russian regions to show that higher regional institutional quality strongly benefits institutionally-dependent manufacturing sectors in terms of both gross output levels and growth rates. Unlike the existing literature on this topic, which uses cross-sectional or pooled specifications, we focus on panel data analysis. This approach mitigates endogeneity concerns and allows for calculating full marginal effects of institutions on manufacturing sectors with different degrees of institutional dependence. Our results imply that significant institutional improvements are needed in order for the Russian economy to diversify away from heavy reliance on oil and natural gas.

Suggested Citation

  • Michael Alexeev & Andrey Chernyavskiy, 2019. "The impact of institutional quality on manufacturing sectors in Russia: panel data analysis," CAEPR Working Papers 2019-004, Center for Applied Economics and Policy Research, Department of Economics, Indiana University Bloomington.
  • Handle: RePEc:inu:caeprp:2019004
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    File URL: https://caepr.indiana.edu/RePEc/inu/caeprp/CAEPR2019-004.pdf
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    References listed on IDEAS

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    More about this item

    Keywords

    relationship specificity; institutional quality; allocation of industry; 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 - Economic Systems - - Socialist Systems and Transition Economies - - - Performance and Prospects

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