IDEAS home Printed from https://ideas.repec.org/
MyIDEAS: Login to save this paper or follow this series

To Divest or not to Divest? Social Assets in Russian Firms

  • Tuuli Juurikkala

    ()

  • Olga Lazareva

    ()

In the planned economy firms were made responsible for providing their workers with social services, such as housing, day care and medical care. In the transforming Russia of the 1990s, social assets were to be transferred from industrial enterprises to the public sector. A law on divestment was put into force but it provided mostly general principles. Thus, for a period of several years, property rights over a major part of social assets, most notably housing, were not properly defined as the transfer decisions were largely left for the local level players to make. Strikingly, the time when assets were divested varied considerably across firms. In this paper we take a political economy approach and utilize recent survey data from 404 medium and large industrial enterprises in 40 Russian regions to study the effects different forms of bargaining between the firm and the municipality may have on the timing decisions. In particular, we apply survival data analysis to explore the determinants of the divestiture timing. Our results show that the firms which divested assets later receive more benefits from the local authorities, especially in places where there are more benefits to extract (i.e. the local budget is richer). Further, we find evidence that the firms which transferred assets later performed relatively worse in 2002 in terms of profitability, productivity and investments. Finally, the data shows that poorly defined property rights have an adverse effect on the incentives to invest in social assets, and hence on the quality of public service provision.

If you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.

File URL: http://www-sre.wu-wien.ac.at/ersa/ersaconfs/ersa04/PDF/637.pdf
Download Restriction: no

Paper provided by European Regional Science Association in its series ERSA conference papers with number ersa04p637.

as
in new window

Length:
Date of creation: Aug 2004
Date of revision:
Handle: RePEc:wiw:wiwrsa:ersa04p637
Contact details of provider: Postal: Welthandelsplatz 1, 1020 Vienna, Austria
Web page: http://www.ersa.org

References listed on IDEAS
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:

as in new window
  1. Saul Estrin & Alan A. Bevan & Boris Kuznetsov & Mark E. Schaffer & Manuela Angelucci & Julian Fennema & Giovanni Mangiarotti, 2001. "The Determinants of Privatised Enterprise Performance in Russia," William Davidson Institute Working Papers Series 452, William Davidson Institute at the University of Michigan.
  2. Zhuravskaya Ekatherina, 2000. "Incentives to Provide Local Public Goods: Fiscal Federalism, Russian Style," EERC Working Paper Series 99-15e, EERC Research Network, Russia and CIS.
  3. 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 409-14, May.
  4. L.M. Freinkman & I. Starodubrovskaya, 1996. "Restructuring of Enterprise Social Assets in Russia: Trends, Problems, Possible Solutions," Working Papers wp96052, International Institute for Applied Systems Analysis.
  5. Irina Slinko & Evgeny Yakovlev & Ekaterina Zhuravskaya, 2004. "Laws for Sale: Evidence from Russia," Economics Working Papers 0046, Institute for Advanced Study, School of Social Science.
  6. Pertti Haaparanta & Tuuli Juurikkala & Olga Lazareva & Jukka Pirttila & Laura Solanko & Ekaterina Zhuravskaya, 2003. "Firms And Public Service Provision In Russia," Working Papers w0041, Center for Economic and Financial Research (CEFIR).
  7. Slinko, Irina & Yakovlev, Evgeny & Zhuravskaya, Ekaterina, 2003. "Institutional Subversion: Evidence from Russian Regions," CEPR Discussion Papers 4024, C.E.P.R. Discussion Papers.
  8. Shleifer, Andrei & Vishny, Robert W, 1994. "Politicians and Firms," The Quarterly Journal of Economics, MIT Press, vol. 109(4), pages 995-1025, November.
  9. Sonin, Konstantin, 2010. "Provincial protectionism," Journal of Comparative Economics, Elsevier, vol. 38(2), pages 111-122, June.
  10. Brown, J David & Earle, John S, 2000. "Competition And Firm Performance: Lessons From Russia," CEPR Discussion Papers 2444, C.E.P.R. Discussion Papers.
  11. Ariane Lambert-Mogiliansky & Konstantin Sonin & Ekaterina Zhuravskaya, 2003. "Capture of Bankruptcy: Theory and Russian Evidence," Working Papers w0038, Center for Economic and Financial Research (CEFIR).
Full references (including those not matched with items on IDEAS)

This item is not listed on Wikipedia, on a reading list or among the top items on IDEAS.

When requesting a correction, please mention this item's handle: RePEc:wiw:wiwrsa:ersa04p637. 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: (Gunther Maier)

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 references are entirely missing, you can add them using this form.

If the full references list an item that is present in RePEc, but the system did not link 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 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.

This information is provided to you by IDEAS at the Research Division of the Federal Reserve Bank of St. Louis using RePEc data.