Foreign direct investment,political risk and the limited access order

The common explanations for political risk in foreign investment focus on the opportunism of host-country governments. However, when governments are too weak to regulate and effectively control them, domestic business elites may also cause political risk. In the literature on political risk, the host state is mostly modelled as a single, cohesive actor and elites outside of the government are not taken into account. By contrast, this paper conceptualises political risk as a lack of government assertiveness vis-à-vis domestic business elites, drawing on the limited access order (LAO) concept developed by Douglass North and his co-authors. It presents the case of Swedish Tele2’s investment in Russia. The mobile telecommunications provider was highly successful in Russia until it became a threat to the business interests of three Russian oligarchs. Regulatory agencies in Russia lacked the necessary authority to provide a level playing field in the telecommunications industry. They did not intervene when Tele2’s access to vital licenses was blocked by competitors, effectively squeezing the Swedes out of the Russian market. This paper concludes that in LAOs foreign investors are initially welcome, but political risk is high when the market competition with domestic elites becomes intense.     

Birds of a feather: Evidence on commonality of corruption and democracy in the origin and location of foreign investment in Russian regions

We examine the effects of subnational variations in corruption and democratization on the location decisions of foreign investors in Russian regions using firm-level panel data for the period 1996–2007. We link these effects to the level of corruption and type of political regime in the country of origin of a foreign investor. We find a relationship between attributes of foreign investors' home countries and attributes of the regions in which investment takes place: foreign investors from less corrupt and democratic countries tend to invest in less corrupt and more democratic Russian regions, whereas those from more corrupt and non-democratic countries tend to invest in more corrupt and less democratic regions. An inference is that, in Russian regions with high corruption and with autocratic government, foreign direct investment appears driven by the personal interests of controlling regional political elites who collaborate for mutual gain with foreign investors from corrupt and autocratic countries. Our results suggest a general conclusion that origin and location of foreign investment are linked by common political culture.     

Foreign direct investment and governance quality in Russia

This paper studies the effect of poor governance quality on foreign direct investment in Russia. Using a survey of businesses across forty administrative districts, we find that higher frequency of using illegal payments and higher pressure from regulatory agencies, enforcement authorities, and criminals, negatively affect foreign direct investment. Our identification strategy builds on the exogenous cross-regional variation in worker strikes during 1895–1914, the period before the October Revolution. We find that moving from the average to the top governance quality across Russian regions more than doubles the FDI stock.     

On the Geopolitical Discourses of the Russian Yabloko Association, 1993-2001

This article draws attention to the competitive and changing nature of the discursive field of Russian geopolitics. In particular, the article focuses on the geopolitical discourses of the Yabloko Association (from 2001 the Democratic Party of Russia, Yabloko). In the discursive study of geopolitics, which is well developed in the critical geopolitics literature, the study of the geopolitical discourses of political parties has so far been neglected. Five major discourses by Yabloko are identified (1993-2001), with their significance and prominence varying according to changes in the broader geopolitical context. Yabloko's position is located within the general constellation defined by the extreme poles of Westernism (Atlanticism) and Eurasianism. Yabloko represents a third way between these extreme poles and can be situated within the new category of 'pragmatic Russian geopolitics'. Yabloko presents an interesting example of a Russian opposition party whose foreign policy thinking seems capable of both changing with the broader geopolitical context and contributing to the official Russian policy.     

Investment banks' stock ratings,call warrant issuance,and responses from heterogeneous investors: Evidence from Taiwan

We investigate the responses of the different types of investors on stock rating change announcements made by investment banks around call warrant issuances in Taiwan. The unique characteristics of the Taiwan warrants market allow investment banks to make stock rating change announcements around call warrant issuances for the same stocks they rate. In Taiwan, investment banks are also dealers of call warrants, and thus, the profit and loss results from their warrant business are potentially in conflict-of-interest for their stock ratings. Another feature of the Taiwan stock market allows us to disentangle the types of investors initiating the stock trades. We identify three types of investors: institutional investors, experienced retail investors, and ordinary retail investors. Our findings suggest that institutional investors are able to “see-through” the conflict-of-interest in investment banks; experienced investors are able to partially “see-through” the conflict-of-interest, and ordinary retail investors are unable to “see-through” the conflict-of-interest of investment banks.     

Happy partisans and extreme political views: The impact of national versus local representation on well-being

The political party of elected officials can affect the happiness of the voting public through several different channels. Partisan voters will be happier whenever a member of their party controls political office regardless of the policies implemented. It is hypothesized that congruence between individual party identity and state politician affiliations should have a greater impact on citizen happiness than congruence with politicians at the national level due to results from the literature on Tiebout sorting. It is further hypothesized that individuals with extreme ideological views may report greater happiness as their ideology fulfills basic psychological needs for certainty and structure. Using data from the Generalized Social Survey the effect of party congruence of individuals with national and state politicians on happiness is estimated. The effect of extreme ideological political views on happiness is also estimated. Results find that congruence with presidential party affiliation has a much greater impact on happiness than congruence with national legislative affiliation, gubernatorial, or state legislative affiliation contradicting the hypothesis. Those who possess extreme political views are also found to report higher levels of happiness.     

Political connections and labor investment efficiency: Evidence from China's private firms

This study investigates whether political connections affect labor investment efficiency. We test this question in the context of China's private firms, where we find that political connections are negatively associated with labor investment efficiency. We also explore the channels through which political connections reduce labor investment efficiency and provide evidence that political connections aggravate both agency problems and information asymmetry. Further tests show that the influence of political connections is more pronounced for firms with overinvestment problems or high-level political connections, and for firms from regions facing severe unemployment or loose anticorruption. Overall, our results are consistent with the “grabbing hand” argument that politicians destroy firm operational efficiency.     

俄罗斯新一期《国家科技发展计划》特点分析

2019年3月,俄罗斯政府发布《2019—2030年国家科技发展计划》,这是俄罗斯历史上出台的第二个科技发展中长期规划,旨在实现普京第四任期提出的重返世界五大科研强国的目标。整体来看,该计划主要呈现四大特点:大幅增加科技发展相关投入;人力资源培养成为第一要务;高度重视基础研究发展;强调打通从基础研究到技术开发再到产品及服务商业化的整个创新链条。     

Elections, Opportunism, Partisanship and Sovereign Ratings in Developing Countries

We empirically examine whether and how opportunistic and partisan political business cycle (“PBC”) considerations explain election‐period decisions by credit rating agencies (“agencies”) publishing developing country sovereign risk‐ratings (“ratings”). Analyses of 391 agency ratings for 19 countries holding 39 presidential elections from 1987–2000, initially suggest that elections themselves prompt rating downgrades consistent with opportunistic PBC considerations, that incumbents are all likely to implement election‐period policies detrimental to post‐election creditworthiness. But more refined analyses, integrating both opportunistic and partisan PBC considerations in a unified framework, suggest that election‐period agency downgrades (upgrades) are more likely as right‐wing (left‐wing) incumbents, become more vulnerable to ouster by challengers. Together, these results underscore the importance of integrating both opportunistic and partisan PBC considerations into any explanation of election‐period risk assessments of agencies and, perhaps, other private, foreign‐based financial actors important to the pricing and allocation of capital for lending and investment in the developing world.     

Conformism and public news

We study a model where investment decisions are based on investor’s information about the unknown and endogenous return of the investment. The information of investors consists of endogenously determined messages sold by financial analysts who have access to both public and private information on the return. We assume that the return is increasing in the aggregate investment. This results into a beauty contest among analysts (or a “conformism” effect). There may exist multiple equilibria, each of which entails analysts sending the most informative messages possible. Beyond the “regular” equilibrium involving an overweighing of the public information, multiplicity introduces “inverted” equilibria where public information is negatively correlated with the return. The correlation across analysts’ information sources implies that not all the information available is transmitted to investors.     

“一带一路”沿线国家贸易网络结构特征及其对技术进步的影响——基于社会网络分析法的研究*

本文采用社会网络分析法探讨了2008—2018年“一带一路”沿线国家贸易网络结构特征,测算沿线国家贸易网络中心位置对技术进步的影响,并对不同收入国家进行异质性分析。研究发现：“一带一路”沿线国家整体贸易结构比较松散,意大利、土耳其、韩国、俄罗斯、中国和新加坡等国家（地区）位于网络核心,共有23个国家（地区）发挥“中介”或“桥梁”作用,影响着其余沿线国家之间的贸易联系;超过四成的沿线国家（地区）与非贸易伙伴国具有较强的间接贸易关系。贸易网络中心位置的提升能显著促进母国技术进步,间接贸易影响母国技术进步的边际效应大于直接贸易;中高等收入水平国家直接和间接贸易地位和贸易强度的提升均显著促进了技术进步,低等收入国家贸易强度的提升也能促进母国的技术进步。     

War and well-being in transition: Evidence from two natural experiments

This paper assesses the effect of the Russo–Georgian conflict of 2008 and the Ukrainian–Russian conflict of 2014 on the well-being of minorities in Russia. Using the Russian Longitudinal Monitoring Survey (RLMS), we find that the well-being of Georgians in Russia suffered negatively from the 2008 Russo–Georgian conflict. We show that the conflict has no direct effect on the labor market outcomes of Georgians, and therefore, we attribute the negative effect of conflict on well-being to more indirect channels such as fear, altruism, or sympathy. In comparison, we find no general effect of the Ukrainian–Russian conflict of 2014 on the Ukrainian nationals’ happiness. However, the life satisfaction of Ukrainians who reside in the southern regions of Russia in close proximity to Ukraine is negatively affected. We also show that the negative effect of conflict is short-lived with no long-term legacy. Additionally, we analyze the spillover effects of conflict on other minorities in Russia. We find that while the well-being of non-slavic and migrant minorities who have recently moved to Russia is negatively affected, there is no effect on local minorities who have been living in Russia for at least ten years.     

Party hacks and true believers: The effect of party affiliation on political preferences

This paper examines the effect of party affiliation on an individual's political views. To do this, we exploit the party realignment that occurred in the U.S. due to abortion becoming a more prominent and highly partisan issue over time. We show that abortion was not a highly partisan issue in 1982, but a person's abortion views in 1982 led many to switch parties over time as the two main parties diverged in their stances on this issue. We find that voting for a given political party in 1996, due to the individual's initial views on abortion in 1982, has a substantial effect on a person's political, social, and economic attitudes in 1997. These findings are stronger for highly partisan political issues, and are robust to controlling for a host of personal views and characteristics in 1982 and 1997. As individuals realigned their party affiliation in accordance with their initial abortion views, their other political views followed suit.     

俄罗斯对华直接投资的贸易效应研究

俄罗斯一直是我国重要的贸易伙伴国,双边贸易潜力巨大,双向投资日趋活跃,中俄两国经贸关系不断深化。中俄双边投资规模和质量的快速提高,对中俄贸易的发展起到了积极的影响作用。通过分析俄罗斯对华直接投资对中俄贸易所产生的效应,能够更好地促进中俄经贸合作战略升级。本文从贸易与投资规模的角度,选取1992—2008年的中国对俄出口贸易额和对俄进口贸易额作为被解释变量,俄罗斯对华直接投资流量和存量作为解释变量,设立了多元回归分析模型,用以考察俄罗斯对华直接投资对中俄进出口贸易的短期和中长期影响。结果表明：俄罗斯对华直接投资流量对中国对俄出口贸易影响不显著,俄罗斯对华直接投资存量与中国对俄出口贸易之间存在互补效应,俄罗斯对华直接投资流量与中国对俄进口贸易之间存在互补效应,俄罗斯对华直接投资存量与中国对俄进口贸易之间存在替代效应。     

RUSSIAN LIVING STANDARDS DURING THE INDUSTRIALIZATION ERA, 1885–1913*

In this paper, I have examined the relative growth rates of personal consumption, government consumption, and national income in Russia from 1885–1913 and have contrasted them with the “European” model (derived from the U.K. and German experience). Two hypotheses of the conventional model of Russian industrialization were tested: the retarded growth of personal consumption and the accelerated growth of government consumption and investment (relative to the European model) and the growing Europeanization of Russian growth after 1906. The estimates of personal consumption and government consumption failed to sustain either hypothesis. In fact, the reverse hypotheses appear to be more plausible. The lack of data on investment prevented the testing of the investment hypothesis, but the limited evidence which is available does not point to an extraordinary growth of investment. As a final experiment, the combined growth rates of personal and government consumption were compared with a revision of Goldsmith's national income estimates. They were shown to provide strong support for the accuracy of the revision of Goldsmith's estimates.     

Moving to greener pastures? Multinationals and the pollution haven hypothesis

This paper presents evidence on whether multinationals are flocking to developing country “pollution havens”. Although we find some evidence that foreign investors locate in sectors with high levels of air pollution, the evidence is weak at best. We then examine whether foreign firms pollute less than their peers. We find that foreign plants are significantly more energy efficient and use cleaner types of energy. We conclude with an analysis of U.S. outbound investment. Although the pattern of U.S. foreign investment is skewed towards industries with high costs of pollution abatement, the results are not robust across specifications.     

Evolution of corporate governance in Russia: government policy vs. real incentives of economic agents

This article is devoted to analysing the evolution of corporate governance mechanisms in Russia. Special attention is paid to the causes of dramatic discrepancies between the expected outputs of institutional reforms implemented by the Russian government with World Bank and IMF support and the actual behaviour of Russian companies. Why was the model of interaction between enterprises and investors, owners and managers, which had been successful in other countries, rejected by Russian business in the 1990s? And how can we evaluate certain positive changes that have occurred recently in corporate policies of major Russian companies? These questions are answered on the bases of analysis of economic agents' motivation at different stages of development of corporate structures in Russia. The article argues that the need for comprehensive organisational and technological restructuring of enterprises led to the need for a concentrated ownership structure. The formation of such a structure in the late 1990s (which occurred, in fact, contrary to the government's activities) created preconditions for extending the time horizon of dominant owners and managers and for positive qualitative changes in the relations between major Russian companies and their shareholders and investors.     

Tweeting identity? Ukrainian,Russian, and #Euromaidan

Why and when do group identities become salient? Existing scholarship has suggested that insecurity and competition over political and economic resources as well as increased perceptions of threat from the out-group tend to increase the salience of ethnic identities. Most of the work on ethnicity, however, is either experimental and deals with how people respond once identity has already been primed, is based on self-reported measures of identity, or driven by election results. In contrast, here we examine events in Ukraine from late 2013 (the beginning of the Euromaidan protests) through the end of 2014 to see if particular moments of heightened political tension led to increased identification as either “Russian” or “Ukrainian” among Ukrainian citizens. In tackling this question, we use a novel methodological approach by testing the hypothesis that those who prefer to use Ukrainian to communicate on Twitter will use Ukrainian (at the expense of Russian) following moments of heightened political awareness and those who prefer to use Russian will do the opposite. Interestingly, our primary finding in is a negative result: we do not find evidence that key political events in the Ukrainian crisis led to a reversion to the language of choice at the aggregate level, which is interesting given how much ink has been spilt on the question of the extent to which Euromaidan reflected an underlying Ukrainian vs. Russian conflict. However, we unexpectedly find that both those who prefer Russian and those who prefer Ukrainian begin using Russian with a greater frequency following the annexation of Crimea, thus contributing a whole new set of puzzles – and a method for exploring these puzzles – that can serve as a basis for future research.     

Encouraging skill development: Evidence from public-private partnerships in education in Russia’s regions

How and when are governments able to encourage firms and schools to work together to develop workers’ skills? Upgrading the quality of human capital in the workforce is widely seen as a key challenge faced by countries looking to escape the “middle income trap.” Growing attention has been paid to public-private partnerships (PPP) between individual firms and schools as a powerful tool for meeting this challenge, but key facilitators of PPP thought crucial in existing studies – strong, independent employers’ associations and labor unions – are often missing in such settings. To explore the emergence of PPP in skill development in the developing world, we draw on recent reform experiences in Russia’s regions that have led to a surge in complex, costly forms of PPP despite weakly developed business associations and unions. We argue that variation in the administrative capacity of regional governments and their political accountability explains this surge. Strong administrative capacity reassures all parties that regional authorities can monitor their counterparties’ compliance with agreements, while political accountability creates incentives for authorities to do so. We test our argument using original data on the existence and content of firm-school partnerships across all Russia’s regions for 2013.