Empirical study of investment activity＇s drivers in capital-intensive Russian firms

In this paper we present the research results of key factors that determine the investment behavior of Russian companies during 2004-2008. The emphasis is made on the policy of capital expenditures. In the analysis, it included maeroeconomic, some industry factors （growth rate, spread of efficiency （ROIC-WACC）, market and industry risks） as well as some internal factors related to the equity structure and the quality of corporate governance.     

The differential demand for indirect rule: evidence from the North Caucasus

Indirect rule is one of the means that central authorities have long employed in hopes of defusing communal conflict and civil war in multicultural societies. Yet very little is known about the appeal of indirect rule among the ruled themselves. Why do people in some places demand more indirect rule and local autonomy, whereas others seem content to be governed directly by rulers of an alien culture? This is a crucial question with important implications for determining the form of governance that is most likely to provide social order in culturally heterogeneous societies. Although much attention has been given to consider the relative costs and benefits of direct versus indirect rule for the central authorities, the other side of the coin – namely, the variable demand for indirect rule among the members of distinctive cultural groups – has hardly been examined with systematic empirical data. This paper presents a theory of the differential demand for indirect rule and offers an initial test of its principal empirical implications using original micro-level data from the North Caucasus region of Russia. The theory's core claim is that the middle class should express the greatest demand for indirect rule, while both the upper and lower classes should prefer more direct rule. The theory therefore predicts that there will be an inverse parabolic relationship between the demand for indirect rule and economic class. The findings are largely consistent with these theoretical expectations.     

Rational or reckless? Georgia's zugzwang in the Caucasus

Although the 2008 Russian-Georgian war was a military defeat for Georgia, it has only reinforced Georgia's westward trajectory. One noteworthy difference from Georgia's pre-war policy is a new regional strategy – the North Caucasus Initiative – that seeks to create a soft power alternative to Russia's military dominance in the region. We suggest that this approach is rational rather than reckless, as some critics have claimed. It represents a carefully calculated strategy that is already benefiting Georgia and from which all concerned parties, including Russia, stand to gain. If the South and North Caucasus were more open and less divided – a direction in which this new initiative appears to point – the Caucasus could become more prosperous and more stable. That would serve Russia's long-term interest by significantly reducing the cost of subsidies to sustain and stabilize the volatile region.     

Panel on Growth and Technology in Perestroyka

A part of the proceedings of the first joint Soviet Economy roundtable, focused on the pivotal role of modern technology in perestroyka, is presented in the form of questions and answers reflecting a lively debate between distinguished Soviet and American economists. Adaptation to new technologies is analyzed in light of uskoreniye, plan priorities, and a variety of factors influencing economic growth. Also debated are issues relating to enterprises and industries, particularly within the context of contrasts between the civilian and military economies. Specific issues such as the tradeoffs between centralization and autonomy are discussed in some detail. Journal of Economic Literature, Classification Numbers: 052, 124, 621.