Russian enterprises in mid-2010: Slow improvements in the context of a high degree of economic uncertainty

The results of a recent regular survey of opinions among enterprises of the real economy sector, which was conducted by the Laboratory for the Analysis and Forecasting of Microeconomic Processes of the Institute of Economic Forecasting of the RAS (IEF), are analyzed in this paper.     

Russian industries at the beginning of 2011: Current issues and investment climate

The results of a regular survey of companies in the real economic sector conducted by the laboratory of analysis and forecasting of microeconomical processes of the Institute of Economic Forecasting, Russian Academy of Sciences, are analyzed and commented.     

DETERMINANTS OF INFLATION IN GHANA: AN EMPIRICAL INVESTIGATION

This paper provides an empirical analysis of the factors accounting for inflation dynamics in Ghana using the bounds test and other econometric approaches. We find that real output, nominal exchange rate, broad money supply, nominal interest rate and fiscal deficit play a dominant role in the inflationary process in Ghana. To the extent that output growth by far has the strongest impact on inflation, targeting supply‐side constraints will help moderate price inflation. The paper concludes that inflation in Ghana is explained by a combination of structural and monetary factors consistent with prior studies.     

The cluster approach in the innovation development strategy of foreign countries

Foreign experience in carrying out cluster policy and the scales of distribution and the variety of cluster structure types abroad are considered and generalized. The main attention is given to innovation directivity as the key factor of increasing regional and national economic competitiveness. The important role of the state in formation of effective cluster policy providing substantial improvement in the business climate and stimulating the priority development of high-tech fields is placed in strong relief. The next issue of the journal will contain an article about the situation in Russia (Ed.).     

Note on the applicability of the VCG mechanism to capacitated assignment problems and extensions

For the allocation of heterogeneous items, it is known that the buyers-are-substitutes condition is necessary and sufficient to ensure that a pricing equilibrium can yield the same allocation and payments as the VCG mechanism. Furthermore, concavity of the corresponding transferable utility TU-game guarantees that this VCG outcome can also be achieved by an ascending price auction. We show that concavity, and hence the buyers-are-substitutes condition, holds for the TU-game of the assignment problem with general capacities. Therefore, the VCG mechanism is supported by a pricing equilibrium which can also be achieved by an ascending auction. We also show that the buyers-are-substitutes condition, and hence concavity, does not hold anymore for very natural and straightforward extensions of this problem. This shows that the necessity of the substitutes property is a considerable restriction on the applicability of the VCG mechanism.     

Foreign Direct Investment in the Enlarged EU: Do Taxes Matter and to What Extent?

Foreign direct investment is of increasing importance in the European Union. This paper estimates the effect of taxes on foreign direct investment (FDI) flows and on three sub-components of these flows for the countries of the enlarged European Union. The model in the spirit of gravity equations robustly explains FDI flows between the 25 member states. Sample selection needs to be addressed in the estimation. We show that the different subcomponents of FDI should and indeed do react differently to taxes. After controlling for unobserved country characteristics and common time effects, the top statutory corporate tax rate of both, source and host country, turn insignificant for total FDI and investment into equity. However, high source country taxes clearly increase the probability of firms to re-invest profits abroad and lower the percentage of debt financed FDI. This might reflect profit re-allocation to avoid taxes. Market size factors have the expected signs.

CEO DUALITY AND FIRM PERFORMANCE: WHAT'S THE FUSS?

Rising shareholder activism following poor corporate performance and a subsequent drop in shareholder value at many major U.S. corporations had rekindled interest in duality and corporate governance. Despite limited empirical evidence, duality (chairman of the board and CEO are the same individual) has been blamed, in many cases, for the poor performance, and failure of firms to adapt to a changing environment. In examining the relationship between duality and firm performance, this study considers the announcement effects of changes in duality status, accounting measures of operating performance for firms that have changed their duality structure, and long-term measures of performance for firms that have had a consistent history of a duality structure. Our results suggest that: (1) the market is indifferent to changes in a firm's duality status; (2) there is little evidence of operating performance changes around changes in duality status; and (3) there is only weak evidence that duality status affects long-term performance, after controlling for other factors that might impact that performance.