Are Oligarchs Productive? Theory and Evidence

49 Pages Posted: 4 Nov 2004  

Yuriy Gorodnichenko

University of California, Berkeley - Department of Economics; National Bureau of Economic Research (NBER); IZA Institute of Labor Economics

Yegor Grygorenko

Citigroup Russia

Multiple version iconThere are 2 versions of this paper

Date Written: April 24, 2006

Abstract

This paper develops a partial equilibrium model to account for stylized facts about the behavior of oligarchs, politically and economically strong conglomerates in transition and developing countries. The model predicts that oligarchs are more likely than other owners to invest in productivity enhancing projects and to vertically integrate firms to capture the gains from possible synergies and, thus, oligarchs can be socially beneficial. Using a unique dataset comprising almost 2,000 Ukrainian open joint stock companies, the paper tests empirical implications of the model. In contrast to commonly held views, econometric results suggest that, after controlling for endogeneity of ownership, oligarchs tend to improve the performance of the firms they own relative to other firms.

Keywords: Oligarch, transition, firm performance, property rights, treatment effect

JEL Classification: C21, C25, D24, O17, P26, P31

Suggested Citation

Gorodnichenko, Yuriy and Grygorenko, Yegor, Are Oligarchs Productive? Theory and Evidence (April 24, 2006). Available at SSRN: https://ssrn.com/abstract=613692 or http://dx.doi.org/10.2139/ssrn.613692

Yuriy Gorodnichenko (Contact Author)

University of California, Berkeley - Department of Economics ( email )

549 Evans Hall #3880
Berkeley, CA 94720-3880
United States

HOME PAGE: http://www.econ.berkeley.edu/~ygorodni/index.htm

National Bureau of Economic Research (NBER)

1050 Massachusetts Avenue
Cambridge, MA 02138
United States

IZA Institute of Labor Economics

P.O. Box 7240
Bonn, D-53072
Germany

Yegor Grygorenko

Citigroup Russia ( email )

Moscow 125047
Russia

Paper statistics

Downloads
135
Rank
149,146
Abstract Views
1,436