IDEAS home Printed from https://ideas.repec.org/p/zbw/bofitp/bdp2003_016.html
   My bibliography  Save this paper

Firms and public service provision in Russia

Author

Listed:
  • Haaparanta, Pertti
  • Juurikkala, Tuuli
  • Lazareva, Olga
  • Pirttilä, Jukka
  • Solanko, Laura
  • Zhuravskaya, Ekaterina

Abstract

This paper reports first results from a survey of 404 middle-sized and large manufacturing firms from 40 Russian regions in April-June 2003.We examine the extent of social service and infrastructure provision by the firms and the firms assessment of the quality of public infrastructure and the regulatory environment.Background information of ownership, investment, performance, competition, and finance decisions of the firms is also gathered. The data reveal that despite major divestments of social services during 1990s, a great majority of firms still provide at least some form of social services.For example, 56% of the firms have their own housing or support local housing, and 73% of the firms have recreation facilities or support employee s recreation activities. While managers view the social service provision as non-essential and costly, many of the firms continue to provide these services, even to users other than their own workforce. The quality of public infrastructure is generally assessed as being good or satisfactory; the respondents were the least satisfied with the quality of roads.Over a half of the firms provide their own heat, but mainly due to technological reasons although public service interruptions do occur and 24% of the firms give support to the maintenance and construction of public road network. The regulatory burden the firms face continues to be severe.In more than half of the firms, for example, the general manager has to spend more than two weeks in negotiations about public infrastructure with the authorities. These descriptive results indicate that there is still a lot scope for improvement in the quality and quantity of public service provision in Russia.Enterprises are still engaged rather heavily in social service provision, road network would require improvements, and the easing of regulatory burden should continue. Addressing these questions is likely to be vital for the sustainability of investments and growth in Russia. The paper is part of the project Infrastructure and Welfare Services in Russia: Enterprises as Beneficiaries and Service Providers financed by the Academy of Finland (project number 200936), the World Bank, and Yrjö Jahnsson Foundation.The project has also received support from the Bank of Finland Institute for Economies in Transition.

Suggested Citation

  • Haaparanta, Pertti & Juurikkala, Tuuli & Lazareva, Olga & Pirttilä, Jukka & Solanko, Laura & Zhuravskaya, Ekaterina, 2003. "Firms and public service provision in Russia," BOFIT Discussion Papers 16/2003, Bank of Finland Institute for Emerging Economies (BOFIT).
  • Handle: RePEc:zbw:bofitp:bdp2003_016
    as

    Download full text from publisher

    File URL: https://www.econstor.eu/bitstream/10419/212530/1/bofit-dp2003-016.pdf
    Download Restriction: no
    ---><---

    Other versions of this item:

    References listed on IDEAS

    as
    1. Frye, Timothy & Zhuravskaya, Ekaterina, 2000. "Rackets, Regulation, and the Rule of Law," The Journal of Law, Economics, and Organization, Oxford University Press, vol. 16(2), pages 478-502, October.
    2. Ariane Lambert-Mogiliansky & Konstantin Sonin & Ekaterina Zhuravskaya, 2003. "Capture of Bankruptcy: Theory and Russian Evidence," Working Papers w0038, Center for Economic and Financial Research (CEFIR).
    3. Mike Burkart & Fausto Panunzi & Andrei Shleifer, 2003. "Family Firms," Journal of Finance, American Finance Association, vol. 58(5), pages 2167-2201, October.
    4. Brown, J David & Earle, John, 2001. "Competition Enhancing Policies and Infrastructure: Evidence from Russia," CEPR Discussion Papers 3022, C.E.P.R. Discussion Papers.
    5. Yoshiro Miwa & J. Mark Ramseyer, 2003. "Does Ownership Matter? Evidence from the Zaibatsu Dissolution Program," Journal of Economics & Management Strategy, Wiley Blackwell, vol. 12(1), pages 67-89, March.
    6. J. David Brown & John S. Earle, 2003. "The reallocation of workers and jobs in Russian industry," The Economics of Transition, The European Bank for Reconstruction and Development, vol. 11(2), pages 221-252, June.
    7. Saul Estrin & Alan A. Bevan & Boris Kuznetsov & Mark E. Schaffer & Manuela Angelucci & Julian Fennema & Giovanni Mangiarotti, 2001. "The Determinants of Privatised Enterprise Performance in Russia," William Davidson Institute Working Papers Series 452, William Davidson Institute at the University of Michigan.
    8. Hansson, Par & Henrekson, Magnus, 1994. "A New Framework for Testing the Effect of Government Spending on Growth and Productivity," Public Choice, Springer, vol. 81(3-4), pages 381-401, December.
    9. Peter Hogfeldt, 2004. "The History and Politics of Corporate Ownership in Sweden," NBER Working Papers 10641, National Bureau of Economic Research, Inc.
    10. Marco Becht & Colin Mayer, 2002. "Corporate control in Europe," Revue d'économie politique, Dalloz, vol. 112(4), pages 471-498.
    11. Zhuravskaya, Ekaterina V., 2000. "Incentives to provide local public goods: fiscal federalism, Russian style," Journal of Public Economics, Elsevier, vol. 76(3), pages 337-368, June.
    12. Irina Slinko & Ekaterina Zhuravskaya & Evgeny Yakovlev, 2005. "Laws for Sale: Evidence from Russia," American Law and Economics Review, American Law and Economics Association, vol. 7(1), pages 284-318.
    13. Shiller, Robert J & Boycko, Maxim & Korobov, Vladimir, 1991. "Popular Attitudes toward Free Markets: The Soviet Union and the United States Compared," American Economic Review, American Economic Association, vol. 81(3), pages 385-400, June.
    14. Grossman, Gene M & Helpman, Elhanan, 1994. "Protection for Sale," American Economic Review, American Economic Association, vol. 84(4), pages 833-850, September.
    15. Rafael La Porta & Florencio Lopez-de-Silanes & Andrei Shleifer & Robert W. Vishny, 1998. "Law and Finance," Journal of Political Economy, University of Chicago Press, vol. 106(6), pages 1113-1155, December.
    16. Scott Gehlbach, 2003. "Taxability and Government Support of Business Activity: Testing Theories of Social-Contract Failure," Working Papers w0028, New Economic School (NES).
    17. Krishna B. Kumar & Raghuram G. Rajan & Luigi Zingales, "undated". "What Determines Firm Size?," CRSP working papers 496, Center for Research in Security Prices, Graduate School of Business, University of Chicago.
    18. Ritva Reinikka & Paul Collier, 2001. "Uganda's Recovery : The Role of Farms, Firms, and Government," World Bank Publications - Books, The World Bank Group, number 13850.
    19. Litwack, John M., 2002. "Central Control of Regional Budgets: Theory with Applications to Russia," Journal of Comparative Economics, Elsevier, vol. 30(1), pages 51-75, March.
    20. Irena Grosfeld & Claudia Senik-Leygonie & Thierry Verdier & Stanislav Kolenikov & Elena Paltseva, 1999. "Dynamism and Inertia on the Russian Labour Market: A Model of Segmentation," William Davidson Institute Working Papers Series 246, William Davidson Institute at the University of Michigan.
    21. David S. Scharfstein & Jeremy C. Stein, 2000. "The Dark Side of Internal Capital Markets: Divisional Rent‐Seeking and Inefficient Investment," Journal of Finance, American Finance Association, vol. 55(6), pages 2537-2564, December.
    22. Reinikka, Ritva & Svensson, Jakob, 2002. "Coping with poor public capital," Journal of Development Economics, Elsevier, vol. 69(1), pages 51-69, October.
    23. Jorge Martinez-Vazquez, 2007. "Asymmetric Federalism in Russia: Cure or Poison?," Chapters, in: Richard M. Bird & Robert D. Ebel (ed.), Fiscal Fragmentation in Decentralized Countries, chapter 8, Edward Elgar Publishing.
    24. Guido Friebel & Sergei Guriev, 2000. "Should I Stay or Can I Go? Worker Attachment in Russia," Working Papers w0008, Center for Economic and Financial Research (CEFIR).
    25. Sonin, Konstantin, 2010. "Provincial protectionism," Journal of Comparative Economics, Elsevier, vol. 38(2), pages 111-122, June.
    26. Barca, Fabrizio & Becht, Marco (ed.), 2001. "The Control of Corporate Europe," OUP Catalogue, Oxford University Press, number 9780199247424.
    27. Berglof, Erik & Perotti, Enrico, 1994. "The governance structure of the Japanese financial keiretsu," Journal of Financial Economics, Elsevier, vol. 36(2), pages 259-284, October.
    28. Guido Friebel & Sergei Guriev, 1999. "Why Russian Workers Do Not Move: Attachment of Workers Through In-Kind Payments," William Davidson Institute Working Papers Series 283, William Davidson Institute at the University of Michigan.
    29. Timothy Frye, 2002. "Capture or Exchange? Business Lobbying in Russia," Europe-Asia Studies, Taylor & Francis Journals, vol. 54(7), pages 1017-1036.
    30. Roger Myerson & Serguey Braguinsky, 2005. "Oligarchic Property Rights and Investment," 2005 Meeting Papers 49, Society for Economic Dynamics.
    31. Becht, Marco, 1999. "European corporate governance: Trading off liquidity against control," European Economic Review, Elsevier, vol. 43(4-6), pages 1071-1083, April.
    32. Lavrov, Aleksei & Litwack, John & Sutherland, Douglas, 2001. "Fiscal federalist relations in Russia: a case for subnational autonomy," MPRA Paper 26537, University Library of Munich, Germany.
    33. Holtz-Eakin, Douglas & Schwartz, Amy Ellen, 1995. "Infrastructure in a structural model of economic growth," Regional Science and Urban Economics, Elsevier, vol. 25(2), pages 131-151, April.
    34. Daron Acemoglu, 2003. "The Form of Property Rights: Oligarchic vs. Democratic Societies," NBER Working Papers 10037, National Bureau of Economic Research, Inc.
    35. repec:bla:jfinan:v:58:y:2003:i:5:p:2167-2202 is not listed on IDEAS
    36. Antoinette Schoar, 2002. "Effects of Corporate Diversification on Productivity," Journal of Finance, American Finance Association, vol. 57(6), pages 2379-2403, December.
    37. Zhuravskaya, Ekaterina & Slinko, Irina & Yakovlev, Evgeny, 2003. "Institutional Subversion: Evidence from Russian Regions," CEPR Discussion Papers 4024, C.E.P.R. Discussion Papers.
    38. Alexeev, Michael & Kurlyandskaya, Galina, 2003. "Fiscal federalism and incentives in a Russian region," Journal of Comparative Economics, Elsevier, vol. 31(1), pages 20-33, March.
    39. Claessens, Stijn & Djankov, Simeon & Lang, Larry H. P., 2000. "The separation of ownership and control in East Asian Corporations," Journal of Financial Economics, Elsevier, vol. 58(1-2), pages 81-112.
    40. Sergei Guriev & Andrei Rachinsky, 2004. "Ownership concentration in Russian industry," Working Papers w0045, New Economic School (NES).
    41. Edward M. Graham, 2003. "Reforming Korea's Industrial Conglomerates," Peterson Institute Press: All Books, Peterson Institute for International Economics, number 341, April.
    42. Andrei Shleifer & Robert W. Vishny, 1994. "Politicians and Firms," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 109(4), pages 995-1025.
    43. Marco Becht & Fabrizio Barca, 2001. "The control of corporate Europe," ULB Institutional Repository 2013/13302, ULB -- Universite Libre de Bruxelles.
    44. Simon Commander & Mark Schankerman, 1997. "Enterprise restructuring and social benefits," The Economics of Transition, The European Bank for Reconstruction and Development, vol. 5(1), pages 1-24, May.
    45. repec:bla:etrans:v:11:y:2003-06:i:2:p:221-252 is not listed on IDEAS
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Korppoo, Anna & Korobova, Nina, 2012. "Modernizing residential heating in Russia: End-use practices, legal developments, and future prospects," Energy Policy, Elsevier, vol. 42(C), pages 213-220.
    2. Tuuli Juurikkala & Olga Lazareva, 2006. "Lobbying at the local level: social assets in Russian firms," Working Papers w0061, Center for Economic and Financial Research (CEFIR).
    3. Tuuli Juurikkala & Olga Lazareva, 2004. "To Divest or not to Divest? Social Assets in Russian Firms," ERSA conference papers ersa04p637, European Regional Science Association.
    4. Leppänen, Simo & Linden, Mikael & Solanko, Laura, 2012. "Firms, public good provision and institutional uncertainty: Evidence from Russia," Economic Systems, Elsevier, vol. 36(4), pages 522-530.
    5. Guido Friebel & Sergei Guriev, 2005. "Attaching Workers through In-Kind Payments: Theory and Evidence from Russia," The World Bank Economic Review, World Bank, vol. 19(2), pages 175-202.
    6. Haaparanta, Pertti & Juurikkala, Tuuli, 2007. "Bribes and local fiscal autonomy in Russia," BOFIT Discussion Papers 12/2007, Bank of Finland Institute for Emerging Economies (BOFIT).
    7. Solanko, Laura, 2006. "Coping with missing public infrastructure: an analysis of Russian industrial enterprices," BOFIT Discussion Papers 2/2006, Bank of Finland Institute for Emerging Economies (BOFIT).
    8. repec:hal:spmain:info:hdl:2441/5q3gpbfo7i87lpv8gubeo44app is not listed on IDEAS
    9. Solanko, Laura, 2006. "Essays on Russia's economic transition," Bank of Finland Scientific Monographs, Bank of Finland, volume 0, number sm2006_036, July.
    10. repec:zbw:bofitp:2003_016 is not listed on IDEAS
    11. 岩﨑, 一郎 & Iwasaki, Ichiro & イワサキ, イチロウ, 2007. "取締役会構成とその内生性 : ロシア株式会社の実証分析, Board Formation and its Endogeneity: An Empirical Analysis of Russian Corporations," Discussion Paper Series b37, Institute of Economic Research, Hitotsubashi University.
    12. Solanko, Laura, 2006. "Essays on Russia's economic transition," Scientific Monographs, Bank of Finland, number 2006_036.
    13. repec:zbw:bofitp:2006_004 is not listed on IDEAS
    14. Guido Friebel & Sergei Guriev, 2005. "Attaching Workers through In-Kind Payments: Theory and Evidence from Russia," The World Bank Economic Review, World Bank Group, vol. 19(2), pages 175-202.
    15. Olga Lazareva & Andrei Rachinsky & Sergey Stepanov, 2008. "A Survey of Corporate Governance in Russia," Springer Books, in: Robert W. McGee (ed.), Corporate Governance in Transition Economies, chapter 32, pages 315-349, Springer.
    16. Vladimir Sokolov & Laura Solanko, 2017. "Political Influence, Firm Performance and Survival," HSE Working papers WP BRP 60/FE/2017, National Research University Higher School of Economics.
    17. Juurikkala, Tuuli & Lazareva, Olga, 2006. "Non-wage benefits, costs turnover, and labor attachment: evidence from Russian firms," BOFIT Discussion Papers 4/2006, Bank of Finland Institute for Emerging Economies (BOFIT).
    18. repec:zbw:bofism:2006_036 is not listed on IDEAS
    19. Tuuli Juurikkala & Olga Lazareva, 2006. "Non-wage benefits, costs of turnover, and labor attachment: evidence from Russian firms," Working Papers w0062, Center for Economic and Financial Research (CEFIR).
    20. Tuuli Juurikkala & Olga Lazareva, 2012. "Non‐wage benefits, costs of turnover and labour attachment," The Economics of Transition, The European Bank for Reconstruction and Development, vol. 20(1), pages 113-136, January.
    21. Pertti Haaparanta & Tuuli Juurikkala & Olga Lazareva & Jukka Pirttila & Laura Solanko & Ekaterina Zhuravskaya, 2003. "Firms And Public Service Provision In Russia," Working Papers w0041, Center for Economic and Financial Research (CEFIR).
    22. repec:zbw:bofitp:2007_012 is not listed on IDEAS
    23. Haaparanta, Pertti & Juurikkala, Tuuli, 2007. "Bribes and local fiscal autonomy in Russia," BOFIT Discussion Papers 12/2007, Bank of Finland, Institute for Economies in Transition.

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Ariane Lambert-Mogiliansky & Konstantin Sonin & Ekaterina Zhuravskaya, 2003. "Capture of Bankruptcy: Theory and Russian Evidence," Working Papers w0038, New Economic School (NES).
    2. repec:zbw:bofitp:2003_016 is not listed on IDEAS
    3. Pertti Haaparanta & Tuuli Juurikkala & Olga Lazareva & Jukka Pirttila & Laura Solanko & Ekaterina Zhuravskaya, 2003. "Firms And Public Service Provision In Russia," Working Papers w0041, Center for Economic and Financial Research (CEFIR).
    4. Sergei Guriev & Andrei Rachinsky, 2005. "The Role of Oligarchs in Russian Capitalism," Journal of Economic Perspectives, American Economic Association, vol. 19(1), pages 131-150, Winter.
    5. Sergei Guriev & Andrei Rachinsky, 2004. "Ownership concentration in Russian industry," Working Papers w0045, New Economic School (NES).
    6. repec:hal:spmain:info:hdl:2441/1cu21pio6c90g9i5oedr5hnaa3 is not listed on IDEAS
    7. repec:spo:wpmain:info:hdl:2441/1cu21pio6c90g9i5oedr5hnaa3 is not listed on IDEAS
    8. Tuuli Juurikkala & Olga Lazareva, 2004. "To Divest or not to Divest? Social Assets in Russian Firms," ERSA conference papers ersa04p637, European Regional Science Association.
    9. Irina Slinko & Ekaterina Zhuravskaya & Evgeny Yakovlev, 2005. "Laws for Sale: Evidence from Russia," American Law and Economics Review, American Law and Economics Association, vol. 7(1), pages 284-318.
    10. Sergei Guriev & Andrei Rachinsky, 2005. "The Role of Oligarchs in Russian Capitalism," Journal of Economic Perspectives, American Economic Association, vol. 19(1), pages 131-150, Winter.
    11. Bernard Yeung & Randall Morck & Daniel Wolfenzon, 2004. "Corporate Governance, Economic Entrenchment and Growth," Working Papers 04-21, New York University, Leonard N. Stern School of Business, Department of Economics.
    12. Zhuravskaya, Ekaterina & Slinko, Irina & Yakovlev, Evgeny, 2003. "Institutional Subversion: Evidence from Russian Regions," CEPR Discussion Papers 4024, C.E.P.R. Discussion Papers.
    13. Mike Burkart & Samuel Lee, 2008. "One Share - One Vote: the Theory," Review of Finance, European Finance Association, vol. 12(1), pages 1-49.
    14. Tuuli Juurikkala & Olga Lazareva, 2006. "Lobbying at the local level: social assets in Russian firms," Working Papers w0061, New Economic School (NES).
    15. Zhuravskaya, Ekaterina & Ponomareva, Maria, 2004. "Federal Tax Arrears in Russia: Liquidity Problems, Federal Redistribution or Russian Resistance?," CEPR Discussion Papers 4267, C.E.P.R. Discussion Papers.
    16. Tuuli Juurikkala & Olga Lazareva, 2006. "Non-wage benefits, costs of turnover, and labor attachment: evidence from Russian firms," Working Papers w0062, New Economic School (NES).
    17. Balakrishnan Kavya & Santhakumar Shijin, 2017. "Ownership and Control of Widely and Closely Held Firms in India," Vision, , vol. 21(4), pages 449-460, December.
    18. Eva Jansson, 0. "Deregulation, property rights, and legal system," European Journal of Law and Economics, Springer, vol. 0, pages 1-25.
    19. Randall Morck & Lloyd Steier, 2005. "The Global History of Corporate Governance: An Introduction," NBER Chapters, in: A History of Corporate Governance around the World: Family Business Groups to Professional Managers, pages 1-64, National Bureau of Economic Research, Inc.
    20. Susan Perkins & Randall Morck & Bernard Yeung, 2008. "Innocents Abroad: The Hazards of International Joint Ventures with Pyramidal Group Firms," NBER Working Papers 13914, National Bureau of Economic Research, Inc.
    21. Becht, Marco & Bolton, Patrick & Roell, Ailsa, 2003. "Corporate governance and control," Handbook of the Economics of Finance, in: G.M. Constantinides & M. Harris & R. M. Stulz (ed.), Handbook of the Economics of Finance, edition 1, volume 1, chapter 1, pages 1-109, Elsevier.
    22. Randall Morck, 2011. "Finance and Governance in Developing Economies," Annual Review of Financial Economics, Annual Reviews, vol. 3(1), pages 375-406, December.
    23. Sonin, Konstantin, 2010. "Provincial protectionism," Journal of Comparative Economics, Elsevier, vol. 38(2), pages 111-122, June.

    More about this item

    JEL classification:

    • E0 - Macroeconomics and Monetary Economics - - General
    • E2 - Macroeconomics and Monetary Economics - - Consumption, Saving, Production, Employment, and Investment
    • E3 - Macroeconomics and Monetary Economics - - Prices, Business Fluctuations, and Cycles

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:zbw:bofitp:bdp2003_016. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: ZBW - Leibniz Information Centre for Economics (email available below). General contact details of provider: https://edirc.repec.org/data/bofitfi.html .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.