REGIONAL PROTECTION IN RUSSIA: HARMFUL OR BENEFICIAL?
Evgenia Kolomak
FINAL ACTIVITY REPORT
The work on the project during the second half of the fellowship year was
carried out in accordance with the original timetable and with the suggestions
of the mentors. The major activities were as follows:
1. Reorganization of the literature review on the topic
of the research, focusing of the review and stylized facts on the aims of
the project.
2. Development of the theoretical model.
Development of the theoretical model includes introduction in to the previous
version of the regional government budget constrain and two other tools
of the regional protection: tax exemptions and direct price regulation.
3. Theoretical analysis of the model equilibrium.
The theoretical analysis of the equilibrium properties was developed and
embraces not only the partial equilibrium analysis but general equilibrium
analysis as well. The results have got analytical and graphical interpretations.
The results produced testable empirical hypotheses.
4. Updating of the empirical data.
Empirical data was updated and extended in terms of time period and new
variables.
5. Development of the empirical estimation.
The recommendations of the previous period discussions are to consider
alternative hypotheses motivated by literature that the industrial protection
is a result of social policy and to consider possible endogenous character
of the regressors. The new empirical testing incorporated the recommendations.
Method of the estimations was GMM for panel data. The estimations have not
shown the significant dependence of the regional protection on the social
problem the regions face.
6. Discussion of the results.
The results of the work were discussed with the individual mentors and
with the group mentor.
7. Presentations:
The paper was presented at the Global Development Network conference in
New-Delhi, India (January, 2004) among the works nominated for the Medals
(http://www.gdnet.org/activities/annual_conferences/fifth_annual_conference).
The results of the project were also presented at the public lecture in
Central European University, Budapest (March, 2004).
PUBLICATION REPORT
Two research papers were published:
1. “Regional protection: Positive Analysis” in “Problems
of Economic Development in Russia: Regional and Industrial Aspects”, Novosibirsk,
IEIE RAS, 2004 (in Russian).
2. “Regional protection in Russia” in “Bulletin of Novosibirsk
State University: Socio-Economic Studies” v. 3, N 1, (in Russian).
Paper “Regional protection in Russia: Positive Analysis” was uploaded at
Global Development Network web-site (http://www.gdnet.org/activities/annual_conferences/fifth_annual_conference/conference_papers_by_author).
Policy paper “Why Russian Regional Authorities Subsidize Business?” is
prepared.
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