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2020, Issue 4 (48). Abstracts
Schumpeterian evolution of firms’ capital-labor ratio distribution According to J. Schumpeter innovation and imitation are two key drivers of economic growth. A quantitative realization of this idea using the formalism of kinetic equations was described in a number of papers. In most of these studies only one firm efficiency factor, the total factor productivity, was considered. In general, a description of economic evolution should include more efficiency factors such as, e.g., total factor productivity (TFP) and capital-labor ratio. The present study makes a preliminary step in the direction of two factor model development by considering central planner̕s problem of endogenous growth driven by the capital-labor ratio. The model describes an evolution of a distribution of firms on an odel developmentefficient path by considering a difference-differential analogue of the Burgers’ type equation operating at a set of discrete capital-labor ratio levels. It is shown that if investment efficiency does not depend on the investment size, and production is characterised by decreasing returns to scale then firms concentrate at a certain level of capital-labor ratio. In the case of decreasing efficiency of investment with respect to its size, one observes widening of the distribution of firms in the capital-labor ratio. In addition, it is shown that the latter result holds in the case of increasing returns to scale. Key words: Schumpeterian evolution, economic growth, capital-labor ratio, firms̕ distribution, Burgers’ equation
Bilevel models of investment and tax policy formation in the resource region An analysis is presented of the mechanism of investment and tax policy formation in the resource region, whereby the government provides tax incentives and supports the investor in infrastructure development and, to some extent, in the implementation of mandatory environmental measures. The analysis builds on the bilevel Boolean programming problems. The actual data and dimensions of the model test site capture the specificity of the modeled object and make possible a practical study of the properties of equilibrium solutions. The simulation results indicate the need to take into account the complementarity of investment and tax policies in the strategic planning process. In general, to stimulate private investment, the state should use a full set of tools — to build infrastructure, implement part of the necessary environmental protection measures and provide certain commodity projects with tax incentives of a certain level. The methodology for the formation of such a policy should be based on an analysis of investors’ proposals, general plans for the development of the territory and a search for a compromise of the interests of the budget, population and private investor. The field of application of the research results is the development of a scenario for the development of local natural resources, including infrastructure development plans and investment proposal packages containing rules for granting tax incentives. Key words: mineral resources development program, investment policy, tax incentives, infrastructure development projects, sharing of natural-resource rents, bilevel mathematical programming problems
The Poisson process of machinery degradation: Application to valuation The machinery degradation process is described by a random process in which failures occur with constant intensity, and with each failure the rate of benefits generated by the machinery item reduces by a random amount. If the machinery item begins to generate negative benefits, it is subject to decommissioning. We get explicit expressions for the average life of the machinery items and the coefficient of variation of the service life. Machine’s value is determined by discounting the flow of benefits from its future use. This allows to link this value with the rate of benefits that the machinery item brings. In cases where there is no information on the amount of such benefits, appraisers rely on the machine’s age. However, different machinery items of the same age may be found in a different condition and therefore are characterized by different values. We offer formulas for calculating the percent good factors reflecting the average decrease in the equipment’s value with age. To take into account the effects of income tax, property tax and inflation, it suffices to adjust the discount rate in the constructed model. It has been verified that the proposed dependencies are in a fairly good agreement with market price data for two different types of construction equipment. Key words: machinery, market value, benefits, valuation, age, depreciation, percent good factors, degradation, failures, exponential failure distribution
S.M. Ivashchenko, The Institute of Regional Economy Problems (Russian Academy of Sciences), Saint Petersburg; Financial Research Institute, Ministry of Finance, Russian Federation, Moscow; Saint Petersburg State University, Saint Petersburg, Russia Long-term growth sources for sectors of Russian economy Theoretical models suggest stationary structure of sectors. Sometimes this suggestion is hidden (balanced growth). The ratio of variables for 2 sectors is unit root at the most cases (for 14 Russian sectors and 6 variables per sector). The lowest share of stationary ratios is 5/91 for real value added with ADF test (KPSS test for the same variable leads to 38/91 stationary ratios). The cointegration rank differs across sectors in wide ranges (from 1 for trade (G) or government administration (L) till 5 for agriculture (AB)). The dynamic stochastic partial equilibrium (DSPE) model is created. It is model of firms in DSGE-style and description of the rest economy by exogenous rules. The model is estimated for each of 14 sectors. The model includes 5 sources of stochastic trends: TFP; labor supply; investments efficiency; investments prices; prices of intermediate goods. Any 2 sectors significantly differ by key parameters (production function shares, capital depreciation, and demand elasticity). The drift of unit root sources differs across sectors (including sign). Only few pairs of sectors differ insignificantly (3/182 or 8/91 depending on test specification). The variance decomposition of trends (for various variables) is computed. It varies in wide ranges across sectors and variables. Thus, usage of aggregate data in theoretical model leads to loose of large amount of information. Key words: stochastic trend, unit root, industry, sector
A.S. Strokov, Center for agricultural and food policy at Russian Presidential Academy of National Economy (RANEPA), Moscow, Russia Economical evaluation of externalities using partial equilibrium model Our research investigation shows the possible pathways of natural resource economy with respect of externalities. We analyzed the development of agricultural and forestry products’ export from Russia to China, and the externalities were evaluated as greenhouse gas emissions. We developed five scenarios of Russian economic development until 2030 and 2050 on terms of domestic improvements in soy, rapeseed and corn production, wood production, increase of exports to China. After applying the partial equilibrium model we introduced a correct measure of possible profit by a monetary value of emitted greenhouse gas. In contrast to previous research instead of carbon tax we suggest a measure of social cost of carbon. Our estimates show that it could be effective at 68 USD per 1 metric ton of CO2 equivalent. This method was supposed to evaluate correctly the economic loss from extensive development of forestry and agriculture, taking into account monetary evaluation of externalities. Our results showed that extracting natural resources should be balanced by appropriate ecological programs. This could include but should not be limited to conservation of some part of the territory, which will help to decrease overall GHG emissions, and improve the balance of emissions with respective carbon sequestr on abandoned (conserved) land, which here will be an additional indicator of reducing negative externalities. Key words: sustainable development, export of food, export of wood, greenhouse gas emissions, welfare
A.M. Karminsky, National Research University “Higher School of Economics”, School of Finance, Moscow, Russia Empirical study of the relationship between credit cycles and changes in credit ratings The purpose of this study is to identify relationships between changes in ratings and the impact of credit cycles on them. The following methodology was used: we built up an applied statistical probit-model of multiple-choice to determine ratings changes. Our model includes a credit gap indicator for assessing the impact of the credit cycle. Our empirical research also includes a review of the time changes in the ratings during a ten-year period for developed and developing countries. The results of our study show that credit ratings are not only affected by cyclical changes within the credit cycle, but also are delayed in its relation to the cycle. From a practical point of view, these results indicate the practical need to take into account various macroeconomic factors because of the impact of credit cycles for forecasting and risk management in financial markets. During the changes of credit cycles, the rating agencies consider the shifts in macrostructure and in valuation of parameters accordingly to the distribution and ratings proportion for investment and speculative ratings classes. The level of credit ratings and credit gap indicator are strongly influenced by two macroeconomic factors: GDP growth rates and credit spread, the last impact factor relates to the mechanism of monetary policy (as a narrow lending channel). In the end of the credit cycle and the stage of recession (downturn), which is marked by empirical evidence, large number of speculative credit ratings occur and the credit spread begins increase which leads to the rise of negative effects in financial markets. Key words: credit ratings, rating agencies, credit cycle, credit gap
A.A. Rakov, National Research University “Higher School of Economics”; Institute of Russian History, the Russian Academy of Sciences, Moscow, Russia Priorities of the Soviet agrarian policy in 1953–1964 and attempts to overcome Stalin’s disbalance in agriculture We discuss the following questions: what the party and state agricultural policy was like, what problems it caused and the priorities of development. Step by step the conditions for reconstruction of the Soviet agriculture in a historical context are considered. Besides, concrete Khrushchev’s strides — so called three “super-programs”, namely — virgin lands campaign, corn epopee and “to catch up with America and outstrip it”. Moreover, attempts to get rid of agrarian problems in 1953–1964 and final statistics of gross output of agricultural products are analyzed. As the analysis of documents shows, abolishing of MTS became ineffective and led to the conditions of buyout of all equipment by kolkhozs that resulted in increase of their debts and their gradual devastation. Real per capita measures dethrone the common positive trend. As an exception from such positive tendency we have a year of 1963 which is clearly out, because in fact there was exhaustion of the extensive potential of grain production and tragic summer drought which brought to the failure of grain procurements and became crucial for livestock sector because of that. Subsequent failures in attempts to “feeding people” and provide stable development of agriculture were the reasons for an outflow of teenagers from a village to a city. Key words: N. Khrushchev, G. Malenkov, reforms, MTS, gross output, grain problem, personal household
Productivity growth and inefficient firms’ exit from the market Many industries of the Russian economy show lower productivity at the aggregated level than in advanced countries. The low productivity level is in large part due to the widening efficiency gap between leader companies and a large group of low productive firms in individual industries. Among low productive firms, the catching-up impulse is concentrated in a small group of young and fast growing companies. In recent years, the number of such companies has not been large enough to scale down the heterogeneity of productivity. If the scarring effect of the crisis provoked by the coronavirus pandemic dominates the Russian economy and number of start-ups with growth potential decreases, this will aggravate the problem of already existing heterogeneity of productivity across firms and the lack of catching-up growth of most low productive companies. Acceleration of productivity growth requires coordinated economic policy fostering competition; improving people’s education level and labour mobility; Russian companies’ entry in foreign markets and integration in value chains; firms’ exit from the informal sector; innovation and adaptation of new technologies; access to finance, especially for SMEs. Key words: creative destruction, productivity gap, convergence
I.V. Savin, Ural Federal University named after the first President of Russia B.N. Yeltsin, Yekaterinburg, Russia; Institute of Environmental Science and Technology (ICTA), Autonomous University of Barcelona, Spain Studying market selection in Russia and abroad: Measurement problems, national specificity and stimulating methods This article is devoted to the model of replicator dynamics as an evolutionary theory of competition between firms in economics. We describe in detail how to test this model based on empirical data, as well as the advantages and disadvantages of these methods. The results of testing the replicator dynamics model serve as a measure of the intensity of market selection in an economy. An overview of studies that have tested the replicator dynamics model abroad and in Russia is given. A number of conclusions is drawn about the specificity of functioning of market selection in Russia, in particular, about the presence of a large number of low-performing companies (zombie firms). Several proposals are also being made to stimulate competition in order to accelerate economic growth. In the conclusion, we suggest ways on how to improve the model of replicator dynamics taking into account value chains, and provide information about changes in the assessment of market selection based on world input-output data. Key words: competition, market selection, firm growth, replicator dynamics, zombie firms
Yu.V. Simachev, Center for Industrial Policy Studies, National Research University “Higher School of Economics”, Moscow, Russia Labor productivity in Russian companies: How to foster sustainable growth In this paper, we study the factors, motivations and barriers for productivity growth in Russia. The data is based on a survey of 700 companies of Russian basic non-resource industries. We find inter- and intra-industry divergence of companies by labor productivity level and discuss the evidence for further divergence. Revealed are the factors of high labor productivity level, among which are scale of business, investments into fixed assets and human capital, application of modern digital technologies, export activity and training of employees. The growth of labor productivity is positively associated with firm size, investment activity, digitalization and R&D spending. There is no positive and significant impact of innovation activities on productivity level and its dynamics, which may be a result of low innovation intensity and time lags in effects of innovation activities on revenue. The evidence suggests that innovative firms with positive dynamics of innovation performance are followers of foreign competitors. We find that firms with the leading and lagging levels of labor productivity have different strategies for human capital accumulation. Leading firms combine significant staff turnover with intensive professional development of existing staff, while lagging in productivity firms are not involved in staff turnover and investment in training. While leading in productivity firms compete for the best personnel, lagging firms compete for financial resources. In addition, leading companies find among the highest the risks that qualified personnel would be diverted, while the lagging companies find among the highest the risks of employees’ low motivation. Most of the leading in productivity firms are interested in continuous improvements of labor productivity, while among lagging in productivity firms this problem is important only for one fourth of them. Lack of internal motivation to improve their productivity may reflect failures in the corporate governance system. At the same time, the established model of relations with the state has a significant impact on the respective motivations of companies. Key words: labor productivity, basic non-resource industries, factors of productivity growth, investments in fixed assets, innovation, R&D, digital technology, human capital
H. Blöchliger, OECD, Paris, France Productivity of the Russian firms: Seven stylized facts Productivity in Russia has been falling steadily over the past 15 years. This paper explores firm-level data to understand the contribution of individual firms to aggregate productivity and summarizes findings in the form of seven stylized facts. Policies to address the productivity decline should focus on regulatory reform to strengthen market forces; create a climate that is supportive to innovative start-ups; help unproductive firms to leave the market earlier; foster labour and capital mobility and knowledge transfer between firms and across regional borders; and embrace foreign ownership. These policies should be complemented by targeted support to households and firms severely affected by the covid-19 crisis. This note is built on the findings of an OECD Economics Department Working Paper published in early 2020. Key words: Russian economy; firm-level productivity; productivity gap; foreign ownership; entry and exit of firms Back | ||
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