The Impact of Institutional Quality on Manufacturing Sectors in Russia: Panel Data Analysis

CAEPR WORKING PAPER SERIES 2019-004

42 Pages Posted: 3 Oct 2019

See all articles by Michael Alexeev

Michael Alexeev

Indiana University Bloomington - Department of Economics; Russian Presidential Academy of National Economy and Public Administration

Andrey Chernyavskiy

National Research University Higher School of Economics

Date Written: September 2019

Abstract

We use the 2005-2012 data for Russian regions to show that higher regional institutional quality strongly benefits institutionally-dependent manufacturing sectors in terms of both gross output levels and growth rates. Unlike the existing literature on this topic, which uses cross-sectional or pooled specifications, we focus on panel data analysis. This approach mitigates endogeneity concerns and allows for calculating full marginal effects of institutions on manufacturing sectors with different degrees of institutional dependence. Our results imply that significant institutional improvements are needed in order for the Russian economy to diversify away from heavy reliance on oil and natural gas.

Keywords: relationship specificity, institutional quality, allocation of industry, Russian economy

JEL Classification: D02, O14, P27

Suggested Citation

Alexeev, Michael V. and Chernyavskiy, Andrey, The Impact of Institutional Quality on Manufacturing Sectors in Russia: Panel Data Analysis (September 2019). CAEPR WORKING PAPER SERIES 2019-004. Available at SSRN: https://ssrn.com/abstract=3458938 or http://dx.doi.org/10.2139/ssrn.3458938

Michael V. Alexeev (Contact Author)

Indiana University Bloomington - Department of Economics ( email )

Wylie Hall 105
Bloomington, IN 47405-6620
United States

Russian Presidential Academy of National Economy and Public Administration ( email )

pr. Vernadskogo, 84
Moscow, 119571
Russia

Andrey Chernyavskiy

National Research University Higher School of Economics ( email )

Myasnitskaya street, 20
Moscow, Moscow 119017
Russia

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