Determinants of Barter in Russia: An Empirical Analysis

Christian Mumssen, Irina Dolinskaya, Simon Commander and Irina Tytell

No 2000/155, IMF Working Papers from International Monetary Fund

Abstract: This paper analyzes the causes and consequences of non-monetary transactions in Russia, drawing on a large enterprise survey. We show that barter and offsets are linked to liquidity problems at the level of the firm and to arrears in particular. We find evidence that the state has channeled implicit subsidies to enterprises in the form of tax and utility offsets. The findings help explain the rise of non-monetary transactions during much of the 1990s. We show that non-monetary transactions inhibit enterprise restructuring. Our findings suggest that a policy solution to the non-cash problem would require the state and public utilities to phase out arrears and offsets.

Keywords: WP; liquidity problem; Inter-enterprise offset; trade credit; loss-making firm; barter; tax offsets; non-monetary transactions; arrears; Russia; transition; subsidies; restructuring; networking behavior; firm size; tax arrears; sample firm; illiquid firm; liquidity-constrained firm; enterprise characteristic; incidence of illiquidity; enterprise restructuring; enterprise performance; Liquidity risk; Bank credit; Liquidity; Currencies; Global (search for similar items in EconPapers)
Pages: 33
Date: 2000-08-01
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Citations: View citations in EconPapers (8)

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