18 Pages

Investment and Non-Investment in the Russian Industry

WithAlexandra Batyaeva, Sergei Aukutsionek

The dynamics of capital investment is a little-known aspect of the transitional crisis in Russia. On the one hand, it is undeniable that there was a drastic decline in capital investments in 1992-1998, which is often held responsible for the slow restructuring of the Russian industry. On the other hand, international comparisons show that in these years the ratio of capital accumulation in Russia was as high as in most prosperous economies. This paper studies the investment behavior of Russian firms in order to suggest possible explanations of this paradox. For this purpose it reveals and compares the characteristics of investing and non-investing firms and how these characteristics affect the efficiency of investment policy. Factors limiting capital investment are singled out, in particular those related to the sources of funds. [Article copies available for a fee from The Haworth Document Delivery Service: 1-800-342-9678. E-mail address: <[email protected]> Website: < > © 2001 by The Haworth Press, Inc. All rights reserved.]