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Institutional Determinants of Agent Behavior in Various Markets

Priority areas of development: economics
2016
The project has been carried out as part of the HSE Program of Fundamental Studies.

Research objective

An objective of this research is to assess an influence of institutional and socio-economic factors on behavior of economic agents on educational market, banking services market, and in public procurement.

Research methods

The research objective was reached by means of institutional analysis theory instruments and empirical methods: econometric analysis and social networks analysis.

Empirical basis of research

  1. RLMS-HSE (Russian Longitudinal Monitoring Survey) data.
  2. Longitudinal surveys of HSE students.
  3. Data on social network “vkontakte.ru” users.
  4. IAS «Banks and Finance» (Mobile).
  5. The Russian Federal State Statistics Service data.
  6. The Bank of Russia data.
  7. The First Independent Rating Agency data -www.fira.ru.
  8. Data of the official website for placing data on orders for services and goods -www.zakupki.gov.ru.
  9. Google Scholar data.

Results

The research results encompass specific behavior of agents in higher education, public procurement, banking; analysis of income and spending of households in cities and in rural areas; formation of liberal values in such households.

Within the higher education branch of the project there were discovered factors that influence academic achievements and failures. Apart from this, there was carried out an assessment of the role of social environment for the formation of students’ behavior. Mechanisms of dynamic peer effects transfer were assessed along with time dynamics of academic achievement and failure of students.

Data of longitudinal surveys of HSE students for the years from 2012 to 2016 was used for statistical calculations. It was shown that within social networks of friendship there appears a strong peer effect, while social selection is observed within networks of help. The results received make it possible to capture a nature of social structure in higher education institutions and determine a nature of emerging social segregation. Consequently, there were offered ways to lower the emerging segregation and involve those students who drop out of networks back. The following positive predictors of forming and sustaining friendship ties were singled out: same sex of respondents, affiliation with the same study group, same place of residency during studies (same student dorm), similar academic progress. It is worth pointing out that out of these factors affiliation with the same study group and presence of common friends appeared to be the most valuable.

More to this, we used network approach to analyze publication activity of the scientific community[1]. According to the analysis, there is observed a positive relation (1) between researcher’s citations and a number of co-authors, (2) between citations and network centrality of an author, (3) between citations and average citation rates of co-authors. It is also noteworthy that the Hirsch index (the h-index) and the i10-Index are significantly related to a number of co-authors and an average citation rates of co-authors.

Within the households’ liberal values branch of the project there were carried out econometric calculations based on the RLMS-HSE data for 2006, 2013, and 2015. It is found that higher education is the most important factor in the process of formation of liberal values. In particular, individuals with university degrees have less interest in having prices controlled by the government. It is also shown that a mechanism of an influence of higher education shows itself through the work position of an individual: highly qualified specialists, legislators, top and middle managers show less interest in involvement of governing bodies. More to this, higher education of parents has a positive effect on a formation of liberal values of individuals.

On the basis of the RLMS-HSE data for 1994-2014 there was also carried out an analysis of income and spending of households. A generalized analysis of structural dynamics of income and spending parts of Russian households’ budgets both in city and rural areas was performed in the context of the consumption smoothing theory. Years of the most significant structural changes were determined: the crisis year 1998, and 2006. In order to do this, Ryabtsev structural dynamics index was used. The analysis of changes shows that consumption preferences of Russians can be described within the consumption smoothing theory. Results of regression analysis shows that characteristics of households (age and sex structure, education, employment) are significant for decomposition of a gap between incomes in cities and rural areas. However, their role is relatively small in comparison to a role of regional characteristics: number of vacancies in a region where respondents reside, average income of respondents in a region, presence of communications in a region, distance from a place where respondent resides to a regional center.

Within the banking branch of the research project the five main findings can be singled out.

First, using data on Russian banks for 2001-2010, it was shown that depositors of Russian banks that have regional connections reflected in their names become less sensitive to risks in periods of financial crisis.

Second, influence of signals of foreign origin of a bank on a sensitivity of growth rate of deposits (quantitative market discipline) to risks of banks was studied on the basis data on Russian banks with 100% participation of non-residents in authorized capital for the period from 2007 to 2015. The rate of growth for deposits in foreign banks is least dependent on their riskiness if depositors can see it in names of banks that owners of these banks are non-residents.

Third, the new mechanism of market discipline was offered: currency shifts. It was shown that on a Russian market of private deposits from 2005 to 2015 depositors preferred to open deposits in a foreign currency in more reliable banks.

Fourth, using the 2011-2012 RLMS-HSE data it was discovered that demand for finance products is related to the level of prenatal testosterone (measured by 2D:4D index). It is notable that individuals obtain these biological characteristics at birth.

Finally, using the cross-country data base that combines several sources (household survey LITS II, firms survey BEEPS, and regulators - WB BRSS) it was demonstrated that regulation of competition in banking sector has an impact not only on a market of bank loans, but on a joint market of informal loans (effects of demand on loans differ for firms and individuals).

Within the public procurement branch of the research project procedures of school meals procurement in Moscow region were considered. It was shown that the new procedures introduced by the Federal Law 44 were not immediately used by customers, and in most cases repeated contracts with suppliers were implemented through electronic auctions and sealed bid auctions (request for quotations).

Also procurement of gasoline octane rating of 92 through gas stations were considered for the years from 2011 to 2013. Indicators of unfair behavior for each procurement procedure were considered on the basis of a selection of 10 regions, and it was shown that the more indicators of unfair behavior there are, the higher the relative contract prices there are, which, of course, speaks about corruption in procurement procedures.

Level of implementation, recommendations for implementation or results of implementation of the research results

On the basis of the research that was carried out recommendations on implementation of the results of it in the spheres of higher education management, state social policy management, analysis and regulation of banking system, and effective management in public procurement could be formed.

The results of the higher education branch of the research can be used by administrative bodies of higher education institutions for an overall enhancement of education quality, lowering drop-out risks, increase of publication activity of academics. In particular, in order to improve current academic progress of students, it is important to develop relationships between the groups of students with different academic achievements. For instance, it is worth encouraging students to form groups of individuals with different academic progress while working on specific projects during their studies. Also academic mobility programs can increase qualitative and quantitative indicators of publication activity of academics. Making higher education more accessible will provide more students having relevant and competitive skills for employment market, will broaden scientific and production potential of employers, and consequently increase competitiveness of Russia on world markets.

We believe that improving infrastructure in rural areas will help to reduce the income gap between city areas and rural areas.

Implementation of results of the banking branch of the project will help to optimize policies of Russian banks related to sales targeting, which will stimulate the growth of demand for financial services and will provoke an increase of the level of participation of population on banking and insurance markets. Also it will give incentives for a more extensive consideration of outcomes of regulatory measures for a stimulation of competition on a market of bank loans, and will help to optimize them, especially taking a development of Russian non-banking loans market into consideration. This market is important both for individuals and for small businesses that had low access to loans in the past. Finally, results in banking research will disclose new aspects of sensitivity of depositors to characteristics of banks, which suggests grounds for a more differentiative regulative approach to special groups of banks in Russia and can provide a firmer stability for the whole banking sector.

Results of the public procurement branch of the research project can be used for the analysis of an unfair behavior distribution in procurement. Such an analysis is necessary as unfair behavior leads to an increase of prices. More to this public procurement research results can be used for further comparison of public procurers according to the level of effectiveness of procurement procedures they run.


[1] Google Scholar data for the period from 2007 to 2016

Publications:


Bruhanov M., Nye J., Polyachenko S. S. Does Higher Education Contribute to a Change in Attitudes to Government Price Control in Russia? / NRU Higher School of Economics. Series WP BRP "Economics/EC". 2016.
Bruhanov M., Nye J. V., Polyachenko S. S. 2D:4D and lifetime educational outcomes: Evidence from the Russian RLMS Survey / NRU Higher School of Economics. Series WP BRP "Economics/EC". 2016.
Poldin O. V., Valeeva D., Yudkevich M. M. Which Peers Matter: How Social Ties Affect Peer-Group Effects // Research in Higher Education. 2016. Vol. 57. No. 4. P. 448-468. doi
Креховец Е. В., Польдин О. В. Студенческие социальные сети: формирование, особенности, ключевые игроки // В кн.: XVI Апрельская международная научная конференция по проблемам развития экономики и общества: в 4 кн. / Отв. ред.: Е. Г. Ясин. Кн. 4. М. : Издательский дом НИУ ВШЭ, 2016. С. 581-589.
Докука С. В., Валеева Д. Р., Юдкевич М. М. Ассимиляция успеваемости: анализ коэволюции социальных сетей и академических достижений студентов // В кн.: XVI Апрельская международная научная конференция по проблемам развития экономики и общества: в 4 кн. / Отв. ред.: Е. Г. Ясин. Кн. 1. М. : Издательский дом НИУ ВШЭ, 2016. С. 571-580.
Semenova M., Andrievskaya I. Does banking system transparency enhance bank competition? Cross-country evidence // Journal of Financial Stability. 2016. Vol. 23. P. 33-50. doi
Semenova M., Andrievskaya I. DOES BIOLOGICAL ENDOWMENT MATTER FOR DEMAND FOR FINANCIAL SERVICES? EVIDENCE FROM RUSSIAN HOUSEHOLD SURVEY / NRU Higher School of Economics. Series FE "Financial Economics". 2016. No. WP BRP 52/FE/2016.
Польдин О. В., Юдкевич М. М. Предсказание социальных связей для оценивания эффектов сообучения в российском и бразильском вузе // В кн.: XVI Апрельская международная научная конференция по проблемам развития экономики и общества: в 4 кн. / Отв. ред.: Е. Г. Ясин. Кн. 4. М. : Издательский дом НИУ ВШЭ, 2016. С. 421-427.
Брюханов М. В., Поляченко С. С., Най Дж. В. Влияние перинатального тестостерона на академические достижения и успех на рынке труда // В кн.: XVI Апрельская международная научная конференция по проблемам развития экономики и общества: в 4 кн. / Отв. ред.: Е. Г. Ясин. Кн. 3. М. : Издательский дом НИУ ВШЭ, 2016. С. 298-317.
Брюханов М. В., Поляченко С. С. Отношение к государственному регулированию экономики: анализ международных данных // Региональная экономика: теория и практика. 2015. № 48(423). С. 26-38.
Semenova M., Kulikova V. Informal Loans in Russia: Why Not to Borrow from a Bank? // Review of Pacific Basin Financial Markets and Policies. 2016. Vol. 19. No. 3. P. 1650016-1-1650016-41. doi
Schoors K., Semenova M., Zubanov A. Depositor Discipline in Russian Regions: Flight to Familiarity or Trust in Local Authorities? / National Research University Higher School of Economics. Series WP BRP "Financial Economics". 2016. No. 58/FE/2016.
Semenova M., Shapkin A. Currency Shifts as a Market Discipline Device: The Case of the Russian Market for Personal Deposits / NRU Higher School of Economics. Series FE "Financial Economics". 2016. No. 57/FE/2016.
Leonova L., Krekhovets E. SOCIAL TIES OF UNIVERSITY STUDENTS: EVIDENCE FROM A LONGITUDINAL SURVEY IN RUSSIA / NRU Higher School of Economics. Series EDU "Education". 2016. No. 33.
Nye J. V. What do we really know about durable goods monopolies? The Coase conjecture in economics and its relevance for the safety razor industry, in: The Elgar Companion to Ronald H. Coase. Northampton, Cheltenham : Edward Elgar, 2016. Ch. 16. P. 222-234.