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Crony Capitalism in Ukraine : Relationship between Political Connectedness and Firms' Performance / Balabushko, Oleksii.
World Bank Open Knowledge Repository (formerly "World Bank E-Library Publications") Available online
View online- Format:
- Book
- Government document
- Author/Creator:
- Balabushko, Oleksii.
- Series:
- Policy research working papers.
- World Bank e-Library.
- Language:
- English
- Subjects (All):
- Agriculture.
- Business Cycles and Stabilization Policies.
- Common Carriers Industry.
- Construction Industry.
- Corruption.
- Crime.
- Energy.
- Energy and Environment.
- Energy Demand.
- Food and Beverage Industry.
- Food Security.
- General Manufacturing.
- Industry.
- International Economics and Trade.
- International Trade and Trade Rules.
- Macroeconomics and Economic Growth.
- Plastics and Rubber Industry.
- Political Networks.
- Privatization.
- Pulp and Paper Industry.
- State Capture.
- Taxation.
- Textiles Apparel and Leather Industry.
- Transport.
- Local Subjects:
- Agriculture.
- Business Cycles and Stabilization Policies.
- Common Carriers Industry.
- Construction Industry.
- Corruption.
- Crime.
- Energy.
- Energy and Environment.
- Energy Demand.
- Food and Beverage Industry.
- Food Security.
- General Manufacturing.
- Industry.
- International Economics and Trade.
- International Trade and Trade Rules.
- Macroeconomics and Economic Growth.
- Plastics and Rubber Industry.
- Political Networks.
- Privatization.
- Pulp and Paper Industry.
- State Capture.
- Taxation.
- Textiles Apparel and Leather Industry.
- Transport.
- Physical Description:
- 1 online resource (19 pages)
- Other Title:
- Crony Capitalism in Ukraine
- Place of Publication:
- Washington, D.C. : The World Bank, 2018.
- System Details:
- data file
- Summary:
- 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.
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