The impact of institutional quality on manufacturing sectors in Russia: panel data analysis

Michael Alexeev and Andrey Chernyavskiy ()
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Andrey Chernyavskiy: National Research University Higher School of Economics, (HSE) University of Moscow, Russia

No 2019-004, CAEPR Working Papers from Center for Applied Economics and Policy Research, Department of Economics, Indiana University Bloomington

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 (search for similar items in EconPapers)
JEL-codes: D02 O14 P27 (search for similar items in EconPapers)
Pages: 42 pages
Date: 2019-04
New Economics Papers: this item is included in nep-cis, nep-ene, nep-gro and nep-tra
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Persistent link: https://EconPapers.repec.org/RePEc:inu:caeprp:2019004

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