Investment in Young and Established Microenterprises in Russia

Valentina M. Hartarska

No 24857, 2002 International Congress, August 28-31, 2002, Zaragoza, Spain from European Association of Agricultural Economists

Abstract: This paper shows that imperfections in the credit market and insecurity of property rights affect nonuniformly the investment of younger and established microenterprises in Russia. The empirical analysis of investment is based on the liquidity constraint model but also accounts for the added challenged that the weak institutional structure and the small size of the enterprises pose. Investment in younger firms is most constrained by the availability of funds, while investment in more established microenterprises is affected by the ability of the entrepreneurs to "secure" their property rights by paying bribes. Financial institutions are unable to distinguish good from bad borrowers but lend to firms that have transparent transactions.

Keywords: Agricultural; Finance (search for similar items in EconPapers)
Pages: 15
Date: 2002
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Persistent link: https://EconPapers.repec.org/RePEc:ags:eaae02:24857

DOI: 10.22004/ag.econ.24857

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