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Regular version of the site

Monitoring the Business Climate for Enterprises in the Real Sector and the Service Sector

Priority areas of development: economics
2012
The project has been carried out as part of the HSE Program of Fundamental Studies.

This project was implemented within the framework of the HSE's Basic Research Programme.

Research Object:
Improving the national information infrastructure in Russia provides for the expansion of the information and analytical content of the monitoring of business tendencies in the development of basic industries and their contribution to the overall dynamics of the economic activity.

Extracting from the entire array of economic information qualitative data on the scale and short-term changes in the dynamics of entrepreneurial optimism on such things as the business and investment climate, business activity, business confidence and economic sentiment, expected business tendencies, etc, contributes to the expansion of the regulatory and prognostic competences of decision-makers at all levels of government.

The regularity and timeliness of this research information allows users to react quickly to cyclical and structural changes in the development of industries.

At the same time, adapting the information capabilities of the monitoring of business tendencies to analyzing an economy that in the context of long-term positive growth periodically deviates from the long-term trajectory, experiencing pronounced downturns, and therefore to studying the irregularities in its dynamics, identifying short-term cycles, duration of phases and turning points is one of the basic economic research.

The amplification of the anti-crisis motivation in the behavior of economic agents and the formation in the country of a new model of economic growth, insufficiency of exclusively statistical monitoring of the short-term cyclic changes in the dynamics determine the relevance of the research aimed at building of combined databases with the extensive use of the business community's assessments of existing and anticipated trends in the sectoral and regional level.

Therefore, the main objects of research are businesses from the real sector of the Russian economy, such as manufacturing, construction, wholesale and retail trade, and services.

Research Purpose:
To develop an integrated methodological support for the implementation of the statistical monitoring and economic analysis of a unified system of monitoring sectoral business tendencies in order to obtain the most extensive and objective information describing the current and future development of sectoral and general economic activity.

Empirical Base of the Research:
Information used in the study and contained in the assessments and expectations of economic agents in the real sector of the national economy, the service sector, as well as in those of the participants of the investment and leasing activity allows to evaluate, in particular, the sectoral demand–output situations, behavioral models of business activity–resource availability–market stability, inflationary component of the sectoral activity, employment strategy, investment opportunities and needs, dominant factors limiting production, relationships between the export and import trends, and to expand the potential to analyze business cycles through the use of cyclical indicators.

Thus, the empirical basis of the research is the qualitative database, formed as a result of sectoral business tendency surveys conducted by the Federal State Statistics Service using the methodology developed by the Center for Business Tendency Studies ISSEK HSE, structured according to simple and composite indicators presenting assessments given by economic agents in different sectors of the Russian economy in 1998–2012. Large-scale business tendency surveys are conducted as regular short-term business climate monitoring in manufacturing, construction, retail and wholesale trade, services, leasing and investment activities with a total coverage of a stratified sample population of about 35,000 monitored entities in almost all regions of Russia, which increases the significance of the research findings.

Research Methods:
The main provisions of mathematical statistics, specifically nonparametric statistical analysis of data; econometric methods of decomposing the dynamics of cyclical indicators in the context of a particular form of representation of time series with unobservable cyclical component – namely, the state space model; dynamic factor models used to design the composite indicators.

Currently, the identification and synthesis of the entrepreneurial opinions about the actual business tendencies, the identification based on these of sectoral events, the expansion of the sectoral coverage, ensuring national and international comparability of the national qualitative and quantitative statistics are only a part of using the short-term business climate monitoring findings in the sectoral business tendencies research.

Research Results:
The total volume of the resulting information and analysis material, including the data of regular monitoring in the real sector, obtained in this study was approximately 1100 pages of analysis, tables, graphs, and diagrams. The materials were published regularly in the national mass media (Kommersant, Vedomosti, Rossiyskaya Gazeta, RBC, Moscow News, Novaya Gazeta, etc), regional newspapers and online. About 10 articles were published based on the research in the Russian sectoral economic journals.

All analyses are available on the HSE website.

In the course of the study key recommendations were developed and the composition of the business tendencies monitoring indicators was determined for inclusion in the Russian national system of leading indicators being developed by the Federal State Statistics Service.

In addition, regular business tendencies monitoring in the Russian services sector based on the methodological, technical and organizational findings was included in the Federal Program of statistical surveys in 2012, which confirmed the utility of this research.

Thus, this study presents the required set of methodological and practical activities aimed at enhancing the analysis and information potential of the business tendencies monitoring for the implementation of the indicator approach to the cyclic analysis of macroeconomic dynamics.

Implementation of the Research Findings:
The subject of information and analytical monitoring in an emerging market economy, where the most important question is how to design a macroeconomic policy in the context of accumulation of significant risks due to deceleration of potential growth in developed market economies, becomes the study of uneven economic development and identification of cycles in its dynamics. In this context, the following objectives were resolved:
  •     Identification of the main prerequisites for the use of qualitative indicators in cyclic monitoring;
  •     Identification of the presence of cyclical components in its dynamics;
  •     Determining the type of the oscillations capable of determining the timing of the phases of acceleration and deceleration in the growth cycle, aggregate economic activity;
  •     Building on this basis a structured set of composite indicators, whose cyclical profile is consistent with the cyclical dynamics of sectoral and macroeconomic aggregates.
The focus of the research is on the creation of the body of cyclical indicators involving a group of composite indicators of business tendencies.

According to the main purpose of the research conducted by Center for Business Tendency Studies ISSEK HSE, the concept was formulated and an integrated algorithm was found (the algorithm of building composite indicators of cyclical nature with the broadest possible coverage of the information contained in the results of business tendencies surveys, structured according to the consistency over time of unobserved cyclical component with subsequent identification of the turning points in the dynamics of each indicator and determination on this basis of the possible "averaged" chronology of alternating cyclic phases).

The following research activities were undertaken:
  • Justification of the conceptual and information measuring approaches to designing a flexible set of composite indicators, including business tendencies surveys, structured by group coincidence, lagging and lead in accordance with the direction and time of changes in the dynamics of the growth cycles of the reference statistics;
  • Defining a baseline procedure and criteria of potential indicators, including business tendencies monitoring, for aggregation;
  • Designing a general iterative procedure for constructing a structured set of composite indicators according to the direction, average duration and history of the phases in the unobserved cyclical components of their dynamics;
  • Development of an algorithm integrated in the general iterative procedure to test the business tendencies monitoring indicators for cyclical sensitivity through the decomposition of their dynamics;
  • Updating the methods of joint presentation of the cyclical dynamics of composite indicators of business tendencies monitoring and reference statistics;
  • Presenting existing methods of using dynamic factor models in the construction of composite indicators of business tendencies monitoring;
  • Comparative analysis of the efficiency of PAT methods, Hodrick-Prescott and Christiano-Fitzgerald filters in the decomposition of the dynamics of cyclical indicators.
In addition, empirical tests were conducted of the cyclical profile in the context of the dynamics of the business confidence, business climate, and leading business tendencies indices in the industry, as well as the of the economic sentiment index in 1998-2012. Results demonstrated a high degree of compatibility and coincidence with the cyclical trajectories in the dynamics of the indices of the physical volume of industrial production and GDP.

International Partners: 
Sectoral market environment monitoring methodology is based on the international practice of business tendencies surveys taking into account the peculiarities of the Russian economy at the present stage. It is developed and updated using the scientific and practical potential of the National Bureau of Economic Research (NBER, USA), IFO (Germany), FOF ETH (Switzerland), ISE (Italy), harmonized standards of the European Commission and the OECD, whose long-term survey findings prove the importance and breadth of their use in the system of regulatory impacts on the market economy. In this study, the international partners were Anna Stangl, leading expert of the business tendencies survey unit at IFO Institute, Munich, Germany, and Aloisio Campello, deputy director of the economic cycles department at the Brazilian Institute of Economics.
 

Publications:


Кудряшова Н. В., Пахомова О. П. Деловой климат в строительстве в IV квартале 2012 года / Рук.: Г. В. Остапкович. М. : Издательский дом НИУ ВШЭ, 2012.
Кудряшова Н. В., Пахомова О. П. Деловой климат в строительстве в III квартале 2012 года / Рук.: Г. В. Остапкович. М. : Издательский дом НИУ ВШЭ, 2012.