How attractive is central Eastern Europe for risk capital investors?

This paper addresses the attractiveness of Central Eastern European countries for risk capital investors by the construction of a tailored composite measure. Based on a survey among institutional investors, we define six key drivers that determine an emerging country's attractiveness for this type of investment. Using 42 socio-economic data series as proxies for these six key drivers, we benchmark the Central Eastern European countries with EU-15, Norway, and Switzerland and identify six tier groups of country attractiveness. We highlight socio-economic strengths and weaknesses of Central Eastern Europe and provide guidelines for policy improvements to attract more risk capital funding to spur innovation, entrepreneurship, employment, competitiveness and growth in the emerging region.     

Foreign Investment and National Interests in the Russian Oil and Gas Industry

This article examines the political economy of foreign direct investment in the Russian oil and gas industry in order to explain the limited role of foreign capital in this sector. There are three forms of foreign direct investment in the Russian oil and gas industry: (1) joint ventures, (2) investment within the framework of a production sharing agreement (PSA) and (3) foreign equity investment. The development of these three forms of foreign direct investment is analysed with special reference to the interests of the parties involved, before a conclusion on the political factors determining the conditions for foreign investment is made.     

Industrial conglomerates,risk spreading and the transition in Russia

This article explains the lasting transition crisis of Russian agriculture by applying Hayami & Ruttan's theory of induced innovation. The empirical analysis uses Russian farm data. For various types of farms factor intensities and partial factor productivities are calculated to identify differences in productivity between them. We identify the mechanism through which institutional frictions in Russia influence the choice of technology and the adaptation of technological change. Finally, policy recommendations are derived to make technical change more consistent with relative factor supplies and prices, and improve productivity, especially of inefficient farm types. In our view nothing speaks in favour of expensive Western ‘high-tech’ machinery imports to enhance the efficiency of Russian farms (especially larger ones). Until now the poor operation of domestic markets in Russia has obstructed a sufficient supply of Russian technology consistent with relative scarcities.     

Euro auf Bewährung

2011 war das Jahr der Krisengipfel, die es jedoch kaum vermocht haben, das verloren gegangene Vertrauen in die W?hrungsstabilit?t und die Schuldentragf?higkeit der Euro-Mitgliedstaaten wiederherzustellen. 2012 kann als Jahr der Bew?hrung angesehen werden, in dem sich das Schicksal der europ?ischen Gemeinschaftsw?hrung entscheiden k?nnte. Michael Heinrich diskutiert verschiedene Auswege aus der Krise.     

The impact of fiscal policies on agricultural household decisions

This paper provides a comparative static analysis of farm household's production, consumption, and labor market decisions under alternative tax policies. We explore the implications of non-separable household decisions caused by widespread non-participation in labor, land, financial and/or food markets, as is typical of low income economies. The analytical results indicate that when labor market imperfections occur, most tax-induced responses are ambiguous, mainly due to shadow price effects. This is particularly the case for the labor market and production responses to most tax tools under study, while a decreasing demand for consumption goods appears to be the result in several cases. Furthermore, tax-induced allocation effects may differ between the non-separable and the separable model versions, indicating the potential impact of labor market constraints on farm household responses to tax policies. In particular, standard taxes as well as a land tax may imply production adjustments in the case of non-separability.     

Higher-order risk preferences in social settings

We study prudence and temperance (next to risk aversion) in social settings. Previous experimental studies have shown that these higher-order risk preferences affect the choices of individuals deciding privately on lotteries that only affect their own payoff. Yet, many risky and financially relevant decisions are made in the social settings of households or organizations. We elicit higher-order risk preferences of individuals and systematically vary how an individual’s decision is made (alone or while communicating with a partner) and who is affected by the decision (only the individual or the partner as well). In doing so, we can isolate the effects of other-regarding concerns and communication on choices. Our results reveal that the majority of choices are risk averse, prudent, and temperate across social settings. We also observe that individuals are influenced significantly by the preferences of a partner when they are able to communicate and choices are payoff-relevant for both of them.