Spatial complementarity of FDI: the example of transition countries
This article investigates spatial determinants of FDI location. In particular, it focuses on FDI in neighbouring countries and foreign market potential for a panel of 25 transition countries in 1993–2010. The spatial FDI spillovers are found to be positive and economically large. Moreover, omitting spatial FDI leads to a serious misspecification of the model explaining FDI location and biases estimation of the coefficient of the foreign market potential variable, which is found to be a non-robust determinant of FDI location.
The spatial complementarity is stronger for disaggregated data such as bilateral FDI and sector level FDI. There is substantial heterogeneity of spatial FDI spillovers across sectors. Spillovers are large and positive for services sectors and non-significant or even negative for manufacturing sectors.
The paper explores the evolution of trade and economic relations between Russia and Myanmar in 1948-2018. The author compares the quantitative and qualitative characteristics of Myanmar cooperation with China, India and Russia, highlighting their features and prospects. Summarizing the results, the author states that, despite the currently modest volumes of trade and investment, the potential for developing foreign economic relations between Russia and Myanmar is very high. However, Myanmar is an important link in the regional strategies of China and India, which also belong to the BRICS and the SCO. Therefore, it is impossible for Russia to build its political and economic ties with Myanmar without taking these aspects of regional relations into account.
This volume offers a profound analysis of post-socialist economic and political transformation in the Balkans, involving deeply unequal societies and oligarchical “democracies.” The contributions deconstruct the persistent imaginary of the Balkans, pervasive among outsiders to the region, who see it as no more than a repository of ethnic conflict, corruption and violence. Providing a much needed critical examination of the Yugoslav socialist experience, the volume sheds light on the recent rebirth of radical politics in the Balkans, where new groups and movements struggle for a radically democratic vision of society.
This book contains a unique collection of studies on key economic and social policy challenges faced by countries of the Southern and Eastern Mediterranean region in a short- and long-term perspective. Prepared within the EU funded FP7 project on „Prospective Analysis for the Mediterranean Region (MEDPRO)” conducted in 2010-2013 it takes account on recent political developments in the region (Arab Spring) and their potential consequences. It covers a broad spectrum of topics such as factors of economic growth, macroeconomic and fiscal stability, trade and investment, Euro-Mediterranean and intra-regional economic integration, private sector development and privatizations, infrastructure, tourism, agriculture, financial sector development, poverty and inequality, education, labor market and gender issues.
We review the transition of the Russian banking sector focusing on the interplay between ownership change and institutional change. We find that the state's withdrawal from commercial banking has been inconsistent and limited in scope. To this day, core banks have yet to be privatized and the state has made a comeback as owner of the dominant market participants. We also look at the new institutions imported into Russia to regulate banking and finance, including rule of law, competition, deposit insurance, confidentiality, bankruptcy, and corporate governance. The unfortunate combination of this new institutional overlay and traditional local norms of behavior have brought Russia to an impasse - the banking sector's ownership structure hinders further advancement of market institutions. Indeed, we may now be witnessing is a retreat from the original market-based goals of transition.
Drawing on the neo-institutional approach in organizational theory and global strategy, we advance a theory on the impact that differences in cultural egalitarianism have on multinational firms’ decision of where to engage in foreign direct investment (FDI) across the globe. Egalitarianism expresses a society’s cultural orientation with respect to intolerance for abuses of market and political power; it shapes the ways in which firms holding power interact with different stakeholders. After presenting a series of case illustrations, we find a strong negative impact of egalitarianism distance on FDI flows in a broad sample of nations and for different entry modes. Our results are robust to a broad set of competing accounts, including effects from other cultural dimensions, major features of the legal and regulatory regimes, other features of the institutional system, and economic development. These results hold while controlling for origin and host country factors through a fixed-effects specification as well as by using instruments for egalitarianism. We also find that other cultural influences are important as well. Differences in cultural harmony are actually positively associated with increased FDI flows, likely because multinational firms seek countries with lower societal support for entrepreneurship. FDI further tends to flow from high embeddedness to low embeddedness countries, and we link this in part to international regulatory arbitrage on environmental protection regimes.
In order to remain competitive, firms need to keep the quantity and composition of jobs close to optimal for their given output. Since the beginning of the transition period, Russian industrial firms have been widely reporting that the quantity and composition of hired labour is far from being optimal. This paper discusses what kinds of firms in the Russian manufacturing sector are unable to optimize their employment and why. The main conclusion is that the key issue is an excess of nonviable firms and a shortage of highly efficient firms because of weak selection mechanisms. The main solution is seen to be the creation of institutional conditions that stimulate a more efficient reallocation of labour. The analysis presented in this chapter is based on data from a large-scale survey of Russian manufacturing firms.
The article examines the experience of China's investment policy aimed at creating favorable conditions to attract investment, particularly foreign direct investments, to the most important country's industries. In recent years, this policy (the establishment of free economic zones, trade liberalization, the establishment of an appropriate legislative framework, state support for investors) has brought noticeable positive results, but with the beginning of the global financial crisis allowed to avoid the most painful consequences. This experience taking into account all its particularities can be useful for our economy.
Currently the role of the country in the international arena is basically determined by its economic and political "weight" among the leaders. A comparison of major economic indicators in Brazil, Russia, India, China and South - Africa and other countries is considered. It is noted that the BRICS countries can be an important element in the system of global management, especially in the financial and economic sphere. The BRICS has attracted considerable attention as an alliance that has unusual geographical and functional parameters. This fact allows attributing it to the new format of communication between countries. Belonging to the new markets, the BRICS countries are playing a significant role in contemporary International relations and are active participants in a globalization of the world economy.
The paper examines the structure, governance, and balance sheets of state-controlled banks in Russia, which accounted for over 55 percent of the total assets in the country's banking system in early 2012. The author offers a credible estimate of the size of the country's state banking sector by including banks that are indirectly owned by public organizations. Contrary to some predictions based on the theoretical literature on economic transition, he explains the relatively high profitability and efficiency of Russian state-controlled banks by pointing to their competitive position in such functions as acquisition and disposal of assets on behalf of the government. Also suggested in the paper is a different way of looking at market concentration in Russia (by consolidating the market shares of core state-controlled banks), which produces a picture of a more concentrated market than officially reported. Lastly, one of the author's interesting conclusions is that China provides a better benchmark than the formerly centrally planned economies of Central and Eastern Europe by which to assess the viability of state ownership of banks in Russia and to evaluate the country's banking sector.
The paper examines the principles for the supervision of financial conglomerates proposed by BCBS in the consultative document published in December 2011. Moreover, the article proposes a number of suggestions worked out by the authors within the HSE research team.