Increasing state-owned enterprises’ productivity and estimating Russian private firms’ debt burden: new issue of Russian Journal of Money and Finance
The third issue of the scholarly quarterly Russian Journal of Money and Finance of 2022 has been published.
The response of foreign exchange markets to monetary policy (MP) measures is not always in line with conventional theories assuming that MP tightening appreciates a national currency, whereas its easing depreciates the currency: actual data for the USA and the euro area prove that the response is the opposite at times. As shown by Victoria Bannikova (Lomonosov Moscow State University), this exchange rate puzzle is explained by revisions of market participants’ expectations based on signals from the monetary regulator: the information conveyed by the central bank about adopted MP decisions might offset the impact of these measures on the exchange rate.
The proportion of state-owned enterprises (SOEs) in the Russian economy is high, but their productivity leaves much to be desired. Analysing financial statements for 2008–2015, Evguenia Bessonova (Bank of Russia, HSE University) and Ksenia Gonchar (HSE University) conclude that private firms are superior to SOEs in terms of technical efficiency, and their total factor productivity grows faster than that of SOEs. Private firms have these advantages at almost any level of competition (except in extremely concentrated markets). The authors prove the hypothesis that SOEs’ technical efficiency can be enhanced through more intense competition, whereas the hypothesis that harder budget constraints can increase SOEs’ technical efficiency or the growth rate of their total factor productivity is not confirmed.
To timely identify the exposure of economic sectors to such problems as a deficit of liquidity or difficulties with financing fixed capital investment, it is essential to have a clear understanding of the level of debt burden in these sectors. Anna Burova (Bank of Russia) estimates the debt service ratio for the private non-banking sector based on granular data from the Bank of Russia’s Loan Register. This source containing information on individual loans had never been used before in such estimates and the ratios calculated relying on Loan Register data turned out to be higher than earlier estimates. The calculations help identify over-indebted sectors, e.g., the debt service ratio is above 50% in such industries as insurance and finance, manufacturing of machinery and equipment, food manufacturing, and chemicals and refinery.
The new issue of the Russian Journal of Money and Finance (No. 3, 2022) is available on its website.