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Business tendency monitoring in the real economy and services

Priority areas of development: economics
2014
Department: отдел отраслей социальной сферы
The project has been carried out as part of the HSE Program of Fundamental Studies.

The main goal of research conducted by the Centre for Business Tendency Studies is to provide a methodological support for a harmonized system of sectoral business tendency monitoring and implementation of the results in the practice of statistical observation to expand information content that characterizes the current and expected business trends in the cyclical development of sectoral and aggregate economic activity.

This monitoring system is reliable tool that generates estimates of indicators missing in quantitative statistics, or are not available in a timely manner. The results of such surveys can complement adequately the traditional statistical information, they are available in real time, statistically valid and reliable, and their content and economic logic are transparent for users.

The significance of this information resource grows up considerably in context of increased economic uncertainty and management’s vulnerability, related to economic sanctions and intensified risks that are accompanied by changes in economic agents’ behavior.

As specific tasks of research we consider: the expansion of short-term sectoral business tendency indicators with structural and cyclical nature; adaptation of Russian surveys’ methodology to the international standards adopted in the OECD and BRICS countries to ensure relevant comparisons of information databases. Also we investigate if the innovations in European research are relevant for the Russian sectoral business climate monitoring.

Methodology

Methodology of sectoral business tendency monitoring is based on the international counterpart taking into account the peculiarities of the Russian economy. It is developed and updated using the scientific and practical resources of the National Bureau of Economic Research (NBER, USA), ifo Institute (Germany), OFCE (France), KOF ETH (Switzerland), ISAE (Italy), CIRET (Centre for International Research on Economic Tendency Surveys), standards of OECD and European Commission harmonized business tendency surveys (BTS).

As specific methods for the analysis of survey results we apply the fundamentals of mathematical statistics, specifically statistical analysis of nonparametric data, econometric methods of decomposing the cyclical indicators dynamic, methods of cluster analysis and dynamic factor models.

Empirical base of research

Empirical base of the study is the information contained in estimates and expectations of economic agents in the basic sectors of the real economy (industry, construction, retail and wholesale trade); services, including IT-sector; small business; and participants of leasing and investment activities. Information is collected through regular, real-time and large-scale surveys of the business climate in the country.

Stratified sample of regular sectoral monitoring covers about 34 000 units of observation in almost all Russian regions. Samples of the pilot business climate surveys of small business and IT sector include more than 4 000 units.

Results of research

In this study we carried out for the first time the experimental calculations related to assessment and comparison the unobserved components such as long-term potential level, short non-smoothed gaps and cyclical stochastic oscillations with smoothed amplitude, which characterize the average duration of growth cycles, in the time series of GDP Index and Economic Sentiment Indicator (ESI HSE). The results revealed that the estimates of short gaps in aggregate economic sentiment received through business tendency monitoring can be used as additional information for measuring the output gap in the country.

Moreover, we conducted: joint analysis of the dynamics of short-term composite indicators, which reflect the turning points in cyclical profiles of macroeconomic dynamics in European countries and Russia; experimental behavioral modeling of industry organizations, based on cluster analysis in order to assess preliminary the impact of crisis events on entrepreneurial behavior.

Taking into account demand for expansion of non-quantitative observations we organized pilot surveys of small business in industry, construction and trade, as well as in IT-sector and analyzed business tendencies in these kinds of activities in 2014.

Outcomes of the implementation of the results

The results of business tendency surveys conducted by the Federal State Statistics Service according to methodology of the Center for Business Tendency Studies ISSEK HSE were used to expand greatly the non-quantitative information database. Spatial and temporal structure of the database corresponds to simple and composite indicators reflecting, sentiment of economic agents in various sectors of Russian economy in 1998-2014. The main monitoring results are also included regularly in the OECD database "Business tendency and consumer opinion".

The total volume of information and analytical output prepared in framework of this study, was more than 800 pages of analytical text, tables and graphs (42 information and analytical issues, 38 press releases). Papers were submitted regularly to the federal legislative and executive authorities,published in the national and regional mass media, and online. Based on the study we published 8 papers in Russian economic journals. All analysis is available on the HSE website. 

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