Crony Capitalism in Ukraine : Relationship between Political Connectedness and Firms' Performance
This study combines firm-level data and data on politically exposed people to explore correlation between firms' political connectedness and their economic performance in Ukraine. First, it estimates the share of politically connected firms in...
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World Bank, Washington, DC
2018
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| Online Access: | http://documents.worldbank.org/curated/en/494271528822739302/Crony-capitalism-in-Ukraine-relationship-between-political-connectedness-and-firms-performance http://hdl.handle.net/10986/29900 |
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okr-10986-299002021-06-08T14:42:46Z Crony Capitalism in Ukraine : Relationship between Political Connectedness and Firms' Performance Balabushko, Oleksii Betliy, Oleksandra Movchan, Veronika Piontkivsky, Ruslan Ryzhenkov, Mykola POLITICAL NETWORKS CORRUPTION FIRM PERFORMANCE CRIME RENT SEEKING TRANSPARENCY PUBLIC PROCUREMENT SUBSIDIES TRADE PROTECTIONISM PRIVATIZATION TAXATION This study combines firm-level data and data on politically exposed people to explore correlation between firms' political connectedness and their economic performance in Ukraine. First, it estimates the share of politically connected firms in Ukraine's economy. Second, the study looks at how different the performance of politically connected firms is from that of their nonconnected peers. The analysis finds that 2 percent of firms are politically connected, but they control over 20 percent of the total turnover and over 25 percent of the assets of all Ukrainian companies. Over the past two decades, politically connected firms used various channels to access economic rents: public procurement, subsidized loans, transfers from the budget, trade regulations that restrict imports, privileged access to state assets through privatizations, and beneficial tax regimes. There is a strong negative correlation between political connection and productivity. Politically connected firms are larger and employ more people, but they are less productive and grow slower in turnover and job creation. This may likely account for lower economic growth and less competitive economy. 2018-06-19T15:30:07Z 2018-06-19T15:30:07Z 2018-06 Working Paper http://documents.worldbank.org/curated/en/494271528822739302/Crony-capitalism-in-Ukraine-relationship-between-political-connectedness-and-firms-performance http://hdl.handle.net/10986/29900 English Policy Research Working Paper;No. 8471 CC BY 3.0 IGO http://creativecommons.org/licenses/by/3.0/igo World Bank World Bank, Washington, DC Publications & Research Publications & Research :: Policy Research Working Paper Europe and Central Asia Ukraine |
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Digital Repository |
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Foreign Institution |
| institution |
Digital Repositories |
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World Bank Open Knowledge Repository |
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World Bank |
| language |
English |
| topic |
POLITICAL NETWORKS CORRUPTION FIRM PERFORMANCE CRIME RENT SEEKING TRANSPARENCY PUBLIC PROCUREMENT SUBSIDIES TRADE PROTECTIONISM PRIVATIZATION TAXATION |
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POLITICAL NETWORKS CORRUPTION FIRM PERFORMANCE CRIME RENT SEEKING TRANSPARENCY PUBLIC PROCUREMENT SUBSIDIES TRADE PROTECTIONISM PRIVATIZATION TAXATION Balabushko, Oleksii Betliy, Oleksandra Movchan, Veronika Piontkivsky, Ruslan Ryzhenkov, Mykola Crony Capitalism in Ukraine : Relationship between Political Connectedness and Firms' Performance |
| geographic_facet |
Europe and Central Asia Ukraine |
| relation |
Policy Research Working Paper;No. 8471 |
| description |
This study combines firm-level data and
data on politically exposed people to explore correlation
between firms' political connectedness and their
economic performance in Ukraine. First, it estimates the
share of politically connected firms in Ukraine's
economy. Second, the study looks at how different the
performance of politically connected firms is from that of
their nonconnected peers. The analysis finds that 2 percent
of firms are politically connected, but they control over 20
percent of the total turnover and over 25 percent of the
assets of all Ukrainian companies. Over the past two
decades, politically connected firms used various channels
to access economic rents: public procurement, subsidized
loans, transfers from the budget, trade regulations that
restrict imports, privileged access to state assets through
privatizations, and beneficial tax regimes. There is a
strong negative correlation between political connection and
productivity. Politically connected firms are larger and
employ more people, but they are less productive and grow
slower in turnover and job creation. This may likely account
for lower economic growth and less competitive economy. |
| format |
Working Paper |
| author |
Balabushko, Oleksii Betliy, Oleksandra Movchan, Veronika Piontkivsky, Ruslan Ryzhenkov, Mykola |
| author_facet |
Balabushko, Oleksii Betliy, Oleksandra Movchan, Veronika Piontkivsky, Ruslan Ryzhenkov, Mykola |
| author_sort |
Balabushko, Oleksii |
| title |
Crony Capitalism in Ukraine : Relationship between Political Connectedness and Firms' Performance |
| title_short |
Crony Capitalism in Ukraine : Relationship between Political Connectedness and Firms' Performance |
| title_full |
Crony Capitalism in Ukraine : Relationship between Political Connectedness and Firms' Performance |
| title_fullStr |
Crony Capitalism in Ukraine : Relationship between Political Connectedness and Firms' Performance |
| title_full_unstemmed |
Crony Capitalism in Ukraine : Relationship between Political Connectedness and Firms' Performance |
| title_sort |
crony capitalism in ukraine : relationship between political connectedness and firms' performance |
| publisher |
World Bank, Washington, DC |
| publishDate |
2018 |
| url |
http://documents.worldbank.org/curated/en/494271528822739302/Crony-capitalism-in-Ukraine-relationship-between-political-connectedness-and-firms-performance http://hdl.handle.net/10986/29900 |
| _version_ |
1764470667328094208 |