Foreign Corporations and the Culture of Transparency: Evidence from Russian Administrative Data

Serguey Braguinsky and Sergey Mityakov

No 17731, NBER Working Papers from National Bureau of Economic Research, Inc

Abstract: Foreign-owned firms from advanced countries carry the culture of transparency in business transactions that is orthogonal to the culture of hiding and insider dealing in many developing economies and economies in transition. In this paper, we document this using administrative data on reported earnings and market values of cars owned by workers employed in foreign-owned and domestic firms in Moscow, Russia. We examine whether closer ties to foreign corporations result in the diffusion of transparency to private Russian firms. We find that Russian firms initially founded in partnerships with foreign corporations are twice as transparent in reported earnings of their workers as other Russian firms, but they are still less than half as transparent as foreign firms themselves. We also find that increased links to foreign corporations, such as hiring more workers from them, raise the transparency of domestic firms. An important channel for this transmission appears to be the need to keep official wages and salaries of incumbent workers close to wages domestic firms have to pay to their newly hired workers with experience in multinationals.

JEL-codes: K42 P37 (search for similar items in EconPapers)
Date: 2012-01
New Economics Papers: this item is included in nep-cis, nep-law and nep-tra
Note: CF PE POL
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (14)

Published as Foreign Corporations and the Culture of Transparency: Evidence from Russian Administrative Data , Serguey Braguinsky, Sergey Mityakov. in Causes and Consequences of Corporate Culture , Zingales and Poterba. 2015
Published as Braguinsky, Serguey & Mityakov, Sergey, 2015. "Foreign corporations and the culture of transparency: Evidence from Russian administrative data," Journal of Financial Economics, Elsevier, vol. 117(1), pages 139-164.

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Journal Article: Foreign corporations and the culture of transparency: Evidence from Russian administrative data (2015)
Chapter: Foreign Corporations and the Culture of Transparency: Evidence from Russian Administrative Data (2011)
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