BOFIT Discussion Papers, Institute for Economies in Transition, Bank of Finland
No 2/2006:
Coping with missing public infrastructure: An analysis of Russian industrial enterprises
Laura Solanko ()
Abstract: During the Soviet period industrial firms not only formed
the backbone of the economy but also directly provided a wide range of
benefits to their municipalities. Firms were in charge of supplying a great
variety of social services, such as housing, medical care and day care. The
need to divest at least some of these functions was generally accepted
already in the early 1990s. Industrial firms' engagement in the provision
of infrastructure services, such as heating, electricity and road upkeep
has to date received much less attention. Using a unique dataset of 404
large and medium-sized industrial enterprises in 40 regions of Russia, this
paper examines public infrastructure provision by Russian industrial
enterprises. We find that, first, to a large degree engagement in
infrastructure provision – as proxied by district heating production – is a
Soviet legacy. Second, firms providing district heating to users outside
their plant area are more likely to have close relations with the local
public sector along many other dimensions.
Keywords: Russia; infrastructure; firm performance; (follow links to similar papers)
JEL-Codes: H54; P31; P35; (follow links to similar papers)
37 pages, April 20, 2006
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