Browsing by Subject "H54"

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  • Solanko, Laura (2006)
    BOFIT Discussion Papers 2/2006
    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 JEL Codes: P31, P35 (Socialist Institutions and Their Transitions), H54
  • Ganelli, Giovanni; Tervala, Juha (2009)
    Bank of Finland Research Discussion Papers 8/2009
    This paper focuses on the trade-off faced by governments in deciding the allocation of public expenditures between productivity-enhancing public infrastructures and utility-enhancing public consumption in a two-country model. The results show that a permanent increase in the domestic stock of public capital financed by a reduction in public consumption raises domestic welfare if the productivity of public capital is high and the weight of public consumption in private utility is low compared with private consumption. The effect on foreign welfare is negative in the short run, but positive in the long run. This implies that, if foreign authorities care not only about the present discounted value of welfare but also about welfare dynamics, a permanent domestic reallocation of public spending might result in a virtuous global technological cycle. Keywords: public spending composition, welfare, imperfect competition, nominal rigidities, JEL classification numbers E62, F41, H42, H54