Foreign Corporations and the Culture of Transparency: Evidence from Russian Administrative Data

57 Pages Posted: 6 Jan 2012 Last revised: 9 Jan 2012

See all articles by Serguey Braguinsky

Serguey Braguinsky

Carnegie Mellon University - Department of Social and Decision Sciences

Sergey Mityakov

Florida State University - Department of Finance

Date Written: January 2012

Abstract

Foreign-owned firms from advanced countries carry the culture of transparency in business transactions that is orthogonal to the culture of hiding and insider dealing in many developing economies and economies in transition. In this paper, we document this using administrative data on reported earnings and market values of cars owned by workers employed in foreign-owned and domestic firms in Moscow, Russia. We examine whether closer ties to foreign corporations result in the diffusion of transparency to private Russian firms. We find that Russian firms initially founded in partnerships with foreign corporations are twice as transparent in reported earnings of their workers as other Russian firms, but they are still less than half as transparent as foreign firms themselves. We also find that increased links to foreign corporations, such as hiring more workers from them, raise the transparency of domestic firms. An important channel for this transmission appears to be the need to keep official wages and salaries of incumbent workers close to wages domestic firms have to pay to their newly hired workers with experience in multinationals.

Suggested Citation

Braguinsky, Serguey and Mityakov, Sergey, Foreign Corporations and the Culture of Transparency: Evidence from Russian Administrative Data (January 2012). NBER Working Paper No. w17731, Available at SSRN: https://ssrn.com/abstract=1980581

Serguey Braguinsky (Contact Author)

Carnegie Mellon University - Department of Social and Decision Sciences ( email )

Pittsburgh, PA 15213-3890
United States

Sergey Mityakov

Florida State University - Department of Finance ( email )

Tallahassee, FL 32306-1042
United States

Here is the Coronavirus
related research on SSRN

Paper statistics

Downloads
16
Abstract Views
510
PlumX Metrics