Coping With Missing Public Infrastructure: An Analysis of Russian Industrial Enterprises

37 Pages Posted: 25 Jul 2007

See all articles by Laura Solanko

Laura Solanko

Bank of Finland - Institute for Economies in Transition (BOFIT)

Date Written: April 24, 2006

Abstract

During the Soviet period industrial firms not only formed the backbone of the economy but also directly provided a wide range of benefits to their municipalities. Firms were in charge of supplying a great variety of social services, such as housing, medical care and day care. The need to divest at least some of these functions was generally accepted already in the early 1990s. Industrial firms' engagement in the provision of infrastructure services, such as heating, electricity and road upkeep has to date received much less attention. Using a unique dataset of 404 large and medium-sized industrial enterprises in 40 regions of Russia, this paper examines public infrastructure provision by Russian industrial enterprises. We find that, first, to a large degree engagement in infrastructure provision - as proxied by district heating production - is a Soviet legacy. Second, firms providing district heating to users outside their plant area are more likely to have close relations with the local public sector along many other dimensions.

Keywords: Russia, infrastructure, firm performance

JEL Classification: P31, P35, H54

Suggested Citation

Solanko, Laura, Coping With Missing Public Infrastructure: An Analysis of Russian Industrial Enterprises (April 24, 2006). BOFIT Discussion Paper No. 2/2006, Available at SSRN: https://ssrn.com/abstract=1002603 or http://dx.doi.org/10.2139/ssrn.1002603

Laura Solanko (Contact Author)

Bank of Finland - Institute for Economies in Transition (BOFIT) ( email )

Helsinki 00101
Finland

HOME PAGE: http://www.bof.fi/en/suomen_pankki/organisaatio/asiantuntijoita/solanko_laura/

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