BOFIT Discussion Papers, Institute for Economies in Transition, Bank of Finland
No 1/2006:
Lobbying at the local level: Social assets in Russian firms
Tuuli Juurikkala ()
and Olga Lazareva ()
Abstract: IIn the planned economy firms were made responsible for
providing their workers with so-cial services, such as housing, day care
and medical care. In the transforming Russia of the 1990s, social assets
were to be transferred from industrial enterprises to the public sector.
The law on divestment provided little more than general principles. Thus,
for a period of several years, property rights concerning a major part of
social assets, most notably hous-ing, were not properly defined, as
transfer decisions were largely left to the local level players.
Strikingly, the time when assets were divested varied considerably across
firms. In this paper we utilize recent survey data from 404 medium and
large industrial enterprises in 40 Russian regions and apply survival data
analysis to explore the determinants of dives-titure timing. Our results
show that in municipalities with higher shares of own revenues in their
budget and thus weaker fiscal incentives, firms used their social assets as
leverage to extract budget assistance and other forms of preferential
treatment from local authorities. We also find evidence that less
competitive firms were using social assets to cushion them-selves from
product market competition. At the same time, we do not find any role for
lo-cal labor market conditions in the divestment process.
Keywords: housing divestment; lobbying; firms; muncipalities; Russia; (follow links to similar papers)
34 pages, April 13, 2006
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