Is Russia Restructuring?
Is Russia Restructuring?

Author: Harry G. Broadman

Publisher: World Bank Publications

Published: 2001

Total Pages: 38

ISBN-13:

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The authors explore the labor dynamics of Russian enterprise restructuring, empirically assessing how patterns of job creation and destruction are related to various aspects of enterprise restructuring across firms in different sectors and regions, and to different forms, sizes, vintages, and performance characteristics of ownership. Evidence from case studies - based on more than 50 site visits in 2000 - suggests that jobs have been destroyed, but only to a limited degree in some sectors and regions, largely because of institutional and incentive constraints and a still-widespread "socialist" corporate culture. Jobs have been created - particularly in sectors where devaluation had the most pronounced effect on important substitution and export promotion - but only slowly, mostly for lack of skilled workers and because regional mobility is limited. Labor turnover appears higher within regions than across regions. Newly available data for 1996 - 99 (provided by Goskomstat) for about 128,000 enterprises in 24 industrial sectors in Russia's 89 regions indicates that the typical firm has experienced only modest downsizing - about 12 percent - in number of employees. Smaller firms have entered, and larger, mature businesses have exited some sectors. Except for a lull in 1998, the rate of job creation has steadily increased and the rate of job destruction has declined, dropping substantially in 1998 - 99. "Voluntary" worker separations remain the main - and growing - form of layoff, and the proportion of layoffs through redundancies is shrinking (now about 4 percent of total separations). Firm size and net employment growth are not statistically related, but form of ownership seems to matter. Firm size is also statistically correlated (positively) with profitability, but restructuring through changes in net employment growth appears not to be. It seems Russian restructuring needs to become more efficient.

The Ability of Banks to Lend to Informationally Opaque Small Businesses
The Ability of Banks to Lend to Informationally Opaque Small Businesses

Author: N. Allen Berger

Publisher: World Bank Publications

Published: 1999

Total Pages: 52

ISBN-13: 9080401536

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August 2001 Large and foreign-owned institutions may have difficulty extending relationship loans to informationally opaque small firms. Bank distress does not appear to affect small business lending, although even small firms may react to bank distress by borrowing from multiple banks. Consolidation of the banking industry is shifting assets into larger institutions that often operate in many nations. Large international financial institutions are geared toward serving large wholesale customers. How does this affect the banking system's ability to lend to informationally opaque small businesses? Berger, Klapper, and Udell test hypotheses about the effects of bank size, foreign ownership, and distress on lending to informationally opaque small firms, using a rich new data set on Argentinean banks, firms, and loans. They also test hypotheses about borrowing from a single bank versus borrowing from several banks. Their results suggest that large and foreign-owned institutions may have difficulty extending relationship loans to opaque small firms, especially if small businesses are delinquent in repaying their loans. Bank distress resulting from lax prudential supervision and regulation appears to have no greater effect on small borrowers than on large borrowers, although even small firms may react to bank distress by borrowing from multiple banks, despite raising borrowing costs and destroying some of the benefits of exclusive lending relationships. This paper--a product of Finance, Development Research Group--is part of a larger effort in the group to study small and medium size firm financing. The authors may be contacted at [email protected], [email protected], or [email protected].

Trade Reform and Household Welfare
Trade Reform and Household Welfare

Author: Elena Ianchovichina

Publisher: World Bank Publications

Published: 1999

Total Pages: 54

ISBN-13:

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Results from a two-step simulation that uses a computable general equilibrium model and detailed consumption and income household data suggests that trade liberalization benefits people in the poorest deciles more than those in the richer ones.

Small- and Medium-size Enterprise Financing in Eastern Europe
Small- and Medium-size Enterprise Financing in Eastern Europe

Author: Leora Klapper

Publisher: World Bank Publications

Published: 2002

Total Pages: 60

ISBN-13:

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There is currently a large interest in understanding firms' access to finance, particularly in the financing of small- and medium-size enterprises (SMEs). But the financing patterns of SMEs across countries is not well understood. For example, little is known about the relative importance of equity, debt, and inter-firm financing for SMEs across countries. The authors use the Amadeus database, which includes financial information on over 97,000 private and publicly traded firms in 15 Eastern and Central European countries. The Amadeus database allows the authors the opportunity to provide a new analysis of the general financing patterns of private firms across a large sample of Eastern European countries. The summary statistics show that the size of the SME sector (as measured by the percentage of total employment) in Eastern European countries is smaller than in most developed economies. Although the authors find in almost every country in the sample a large number of SMEs as a percentage of total firms, the SMEs in Eastern Europe are generally small and hire few employees. However, SMEs seem to constitute the most dynamic sector of the Eastern European economies, relative to large firms. In general, the SME sector comprises relatively younger, more highly leveraged, and more profitable and faster growing firms. This suggests that a new type of firm is emerging in transition economies that is more market- and profit-oriented. But at the same time, these firms appear to have financial constraints that impede their access to long-term financing and ability to grow.

Foreign Direct Investment and Integration Into Global Production and Distribution Networks
Foreign Direct Investment and Integration Into Global Production and Distribution Networks

Author: Bart?omiej Kami?ski

Publisher: World Bank Publications

Published: 2001

Total Pages: 34

ISBN-13:

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Integration into the production and marketing arrangements of multinational corporations may offer many benefits to transition economies that, after a long period of isolation, have liberalized trade and investment. The fragmentation of production offers a unique opportunity for producers in developing countries to move from servicing small local markets to supplying large firms abroad and, indirectly, their customers all over the world.

Local Institutions, Poverty and Household Welfare in Bolivia
Local Institutions, Poverty and Household Welfare in Bolivia

Author: Christiaan Grootaert

Publisher: World Bank Publications

Published: 2001

Total Pages: 72

ISBN-13:

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The authors empirically estimate the impact of social capital on household welfare in Bolivia--where they found 67 different types of local associations. They focus on household memberships in local associations as being especially relevant to daily decisions that affect household welfare and consumption. On average, households belong to 1.4 groups and associations: 62 percent belong to agrarian syndicates, 16 percent to production groups, 13 percent to social service groups, and 10 percent to education and health groups. Smaller numbers belong to religious and government groups. Agrarian syndicates, created by government decree in 1952, are now viewed mainly as community-initiated institutions to manage conmunal resources. They have been registered as legal entities to work closely with municipalities to represent the interests and priorities of local people in municipal decisionmaking. The effects of social capital operate through (at least) three mechanisms: sharing of information among association members; the reduction of opportunistic behavior; and better collective decisionmaking. The effect of social capital on household welfare was found to be 2.5 times that of human capital. Increasing the average educational endowment of each adult in the household by one year (about a 2.5-percent increase) would increase per capita household spending 4.2 percent; a similar increase in the social capital endowment would increase spending 9 to 10.5 percent. They measured social capital along six dimensions: density of memberships, internal heterogeneity of associations (by gender, age, education, religion, etc.), meeting attendance, active participation in decisionmaking, payment of dues (in cash and in kind), and community orientation. The strongest effect came from number of memberships. Active membership in an agrarian syndicate is associated with an average 11.5 percent increase in household spending. Membership in another local association is associated with a 5.3-percent higher spending level. Empirical results partly confirm the hypothesis that social capital provides long-term benefits such as better access to credit and a higher level of trust in the community as a source of assistance in case of need.

Labor Market Flexibility, Flexicurity and Employment
Labor Market Flexibility, Flexicurity and Employment

Author: T. Paas

Publisher:

Published: 2007

Total Pages: 216

ISBN-13:

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This book aims to throw light upon the main changes in the Baltic states' labour markets, laying emphasis on the labour market flexibility, flexicurity and employment issues in the context of the EU eastward enlargement. The European labour markets of both old (EU-15) and new (EU-10) member states are facing big challenges in their current development. There are high expectations connected with improvement of competitiveness of European economy and enlargement of Euro area. Flexible labour markets help to maintain the expected quick economic growth and to adjust to possible asymmetric shocks of Euro area development. The particular significance of the labour market flexibility is also outlined by the Optimal Currency Area Theory (Mundell, 1961), which forms the theoretical framework for the EMU. At the same time a significant increase of labour market flexibility may due to possible increased employment and consequently also income insecurity causing weakening cohesion of a society. to rely on the European social model which stresses the importance of high social security, including also employment security. For improvement of economic growth and competitiveness, the new concept called flexicurity has been introduced. Flexicurity as a policy option in general meaning several ways of social protection for a flexible workforce, which may support social cohesion and sustainable economic growth in the long run perspective. This book brings together new research in this exciting field of economical studies.