Decentralized Bribery and Market Participation

I propose a bribery model that examines decentralized bureaucratic decision‐making. There are multiple stable equilibria. High levels of bribery reduce an economy's productivity because corruption suppresses small business, and reduces the total graft, even though the size of an individual bribe might increase. Decentralization prevents movement towards a Pareto‐dominant equilibrium. Anticorruption efforts, even temporary ones, might be useful to improve participation, if they lower the bribe levels demanded and thus encourage small businesses to participate.     

Spin‐offs: Tackling the Conglomerate Discount

Spin‐offs and other restructuring actions have risen sharply in 2011, driven by the need to streamline business models and increase corporate values. These transactions can be an effective tool for addressing the conglomerate valuation discount that has been a pervasive phenomenon over the past decade, affecting conglomerates in most regions across the world. In particular, North American and Western European conglomerates trade at valuation multiples that are roughly 10% lower than those of their pure‐play peers. A conglomerate discount also prevails in some of the emerging markets, including CEEMEA and Asia. Nevertheless, in some regions, notably Japan and Latin America, conglomerates typically trade at a premium. Although the average conglomerate discount narrowed during the financial crisis due to the perceived benefits of diversification during downturns, almost half of the conglomerates globally trade at a discount, and almost a third of all conglomerates have persistently traded at a discount during the past five years. For such companies, fixing the discount requires a simplification of the business model. The authors show that recent announcements of spin‐offs have led to significant share price outperformance by the parent company in both the short and the longterm, highlighting their effectiveness as a tool to enhance valuation. Spin‐offs can be particularly attractive for those conglomerates that operate unrelated business segments since these firms trade at a sharper discount than diversified firms operating in related businesses. The authors discuss how management should think about the financial implications of spin‐offs, including capital structure considerations, dividend policy, and turnover in the shareholder base.     

Operationalizing opportunities in entrepreneurship research: use of data envelopment analysis

Despite the impressive development of substantive theories in entrepreneurship, without the development of measurement theories, further advancement of the field is problematic. In particular, the notion of opportunities, central to entrepreneurship research, requires adequate macro-level operationalization. We demonstrate how to employ data envelopment analysis (DEA) to operationalize not only innovative opportunities, but also technological arbitrage opportunities. We provide an illustrative example based on a sample of 66 countries during the period of 1993–2002. We include estimates of innovative and arbitrage opportunities for possible use by other scholars, discuss the promise and limitations of such estimates, demonstrate how both innovative and arbitrage opportunities correlate with the rates of entrepreneurial activity, and suggest several possible directions for future research.     

Shareholder access to manager‐biased courts and the monitoring/litigation trade‐off

Facilitating access to courts for outside shareholders is often viewed as a remedy against managerial opportunism. My model shows that, when courts are biased toward managers, reducing the barriers to shareholder suits can lower efficiency because it can lead to either excessive litigation or excessive monitoring of managers by shareholders. The latter effect implies that easy shareholder litigation may lead to a greater use of substitute mechanisms of corporate governance rather than more reliance on the judiciary. I also show that easy shareholder access to manager‐biased courts leads to the formation of more, rather than less, concentrated ownership structures.     

The effect of minimum wage on poverty

To the best of my knowledge, the minimum wage's influence on poverty in Russia has never been investigated. Russian data provide a unique opportunity for studying the effects of the minimum wage on poverty, given significant increases in the minimum wage in recent years, almost complete coverage, and a high representation of full-time workers in poor households. This article examines the effect of the minimum wage on the incidence of poverty and the transitions into and out of poverty in Russia using data from the Russia Longitudinal Monitoring Survey of Higher School of Economics (RLMS-HSE) from 2006 to 2011. The results indicate that the minimum wage in Russia had moderate poverty-reducing effects.     

Agency Costs,Mispricing, and Ownership Structure

Standard theories of ownership assume insiders ultimately bear all agency costs and therefore act to minimize conflicts of interest. However, overvalued equity can offset these costs and induce listings associated with higher agency costs. We explore this possibility by examining a sample of public listings of Japanese subsidiaries. Subsidiaries in which the parent sells a larger stake and subsidiaries with greater scope for expropriation by the parent firm are more overpriced at listing, and minority shareholders fare poorly after listing as mispricing corrects. Parent firms often repurchase subsidiaries at large discounts to valuations at the time of listing and experience positive abnormal returns when repurchases are announced.     

Learning in an estimated medium-scale DSGE model

We evaluate the empirical relevance of learning by private agents in an estimated medium-scale DSGE model. We replace the standard rational expectations assumption in the Smets and Wouters (2007) model by a constant-gain learning mechanism. If agents know the correct structure of the model and only learn about the parameters, both expectation mechanisms produce very similar results, and only the transition dynamics that are generated by specific initial beliefs seem to improve the fit. If, instead, agents use only a reduced information set in forming the perceived law of motion, the implied model dynamics change and, depending on the specification of the initial beliefs, the marginal likelihood of the model can improve significantly. These best-fitting models add additional persistence to the dynamics and this reduces the gap between the IRFs of the DSGE model and the more data-driven DSGE-VAR model. However, the learning dynamics do not systematically alter the estimated structural parameters related to the nominal and real frictions in the DSGE model.     

Ecological tourism in the state image policy structure. Experience and problems of modern Russia

The article deals with the problems of ecological tourism in Russia. The authors give various approaches to the understanding of ecological tourism in modern science, analyse the reasons of interest in this kind of tourism, consider its types and identify specific features. The article provides an overview of the main regions and countries where ecological tourism is developed at a high level and considers some national policy models in the field of ecological tourism. Specific attention is paid to the analysis of the development of ecological tourism in Russia and its current status; the examples of different programmes aiming at support of ecological tourism are given. Specific impetus is given to Russia's resources for the development of ecological tourism, for example, natural landscapes, national parks and nature heritage sites. The authors explore the main challenges to ecological tourism in Russia, identify factors that hinder its development and suggest measures to improve the ecological tourism in the Russian Federation. The authors focus on the projects that promote the improvement of Russia's image as an eco-touristic destination. The authors pay specific attention to the analysis of international cooperation in this field. The article discusses various projects carried out within the framework of bilateral cooperation. The article discusses the role of ecological tourism as a tool for image policy. The article analyses in detail which elements of the Russian image are under the influence of ecological tourism and what are the future prospects of ecological tourism.     

Preparing Russian Small Innovative Enterprises for International Competitiveness: A Scoping Study

Russian small innovative enterprises (SIEs) are emerging as an important force behind the restructuring of the Russian economy and its industrial and commercial infrastructure. The research presented in this paper suggests that there are at least three categories of factors that impact the move of Russian SIEs into international markets: (i) macro-economic obstacles (ii) lacking managerial and business competencies and (iii) differences in culture and business practices. The first factor cannot be directly influenced by the individual SIE, while the latter two represent opportunities of a developmental nature. The work of this paper purports to lay the groundwork for more theoretical follow-up analyses.     

Leasing in Russia: A Case Study

As Russia goes through the process of converting from a command to a market economy, many old business processes and standards had to be terminated and new methods implemented. Leasing is an example of a technique long in use in more developed economies that has been transplanted to Russia, with changes made to reflect the particular circumstances there. This paper examines the current state of leasing in Russia by concentrating on the experiences of one leasing company: Volgopromleasing. Interest rates and inflation rates that fluctuate widely and are sometimes extremely high, as well as a legislative environment that may be expected to change are some of the challenges faced by the firm. However, compensating opportunities exist: many Russian firms desperately need to update their equipment, the government is strongly interested in promoting rapid economic growth, and the legislation currently in effect favors leasing over other methods of acquiring fixed assets. Although leasing has the potential to assist Russian firms in modernizing and growing, and, therefore, to help the Russian economy in its effort to rapidly move to a new market economy, this can only occur in conjunction with other economic initiatives that also provide for growth and stabilization.