Performance of business groups: Evidence from post-crisis Russia

Transition economies like Russia lack properly functioning financial markets and institutions, which results in severe agency and information problems. Business groups in such markets have the potential to offer benefits to member firms, but they also may destroy value. Using a unique database on membership in Russian business groups, we analyze the relationship between group affiliation and firm performance on the basis of a large panel of manufacturing firms for the period 1999-2002. We find that group membership has a positive effect on productive efficiency, but gains from improved productivity in group affiliates do not adequately translate into higher profitability. This is consistent with the expropriation hypothesis, according to which controlling owners of groups extract private benefits by siphoning profits from their members. Among the different group categories delineated by type of controlling owner, the extent of profit dissipation is especially large in groups controlled by private domestic owners, who face a greater risk of possible future expropriation of property. Finally, we examine two potential sources of benefits of membership in business groups: mutual insurance among affiliated firms and preferential treatment from the state via subsidies and tolerated tax arrears. We find that, during the period studied, groups neither provided mutual insurance nor did they receive larger support from the state than unaffiliated firms. Together with findings from the previous literature indicating that, prior to the 1998 financial crisis, group firms benefited from more efficient allocation of capital within groups than in the rest of the economy but not after the crisis, our results suggest that the advantages of group membership recede as the economic and institutional environment gradually improves.business groups; firm performance; transition economy; Russia

Russian business groups: substitutes for missing institutions?

Numerous evidence demonstrate that firms affiliated with business groups in emerging markets outperform their independent counterparts. One of the proposed explanations for such a phenomenon is the more advanced groups’ internal markets structure compared to the rest of the economy. In this paper we test the hypothesis that internal capital markets within Russian business groups overcome the liquidity constraints problem widely spread outside groups. Our findings indicate that even if the groups’ internal capital markets do exist in Russian business groups, their efficiency is rather doubtful and the access to external financing by firms affiliated with the groups is constrained.

Openness of natural information processing systems and short-term and long-term memory

In this paper, various types of memory are considered.Development of the nervous system and the brain of organisms ensures expansion of species with more developed brain. Different characteristics of the brain zones have created different conditions for forming traces of events. The various traces of trace events formed in different parts of the brain provided a wider range of functions and brain responses, which contributed to the survival and expansion of species. The work describes the appearance of memory varieties and the causes of these varieties

Long-time effects of an experimental therapy with mesenchymal stem cells in congenital hydrocephalus

Introduction: Bone marrow-derived mesenchymal stem cells (BM-MSC) are a potential therapeutic tool due to their ability for migrating and producing neuroprotector factors when they are transplanted in other neurodegenerative diseases. Moreover, some investigations have shown that BM-MSC are able to modulate astrocyte activation and neuroprotector factor production. The aim of this study was to evaluate the long-time effects of a BM-MSC experimental therapy in the hyh mouse model of congenital hydrocephalus. Methods: BM-MSC were characterized in vitro and then transplanted into the ventricles of young hydrocephalic hyh mice, before they develop the severe hydrocephalus. Non-hydrocephalic normal mice (wt) and hydrocephalic hyh mice sham-injected (sterile saline serum) were used as controls. Samples were studied by analyzing and comparing mRNA, protein level expressions and immunoreaction related with the progression and severity of hydrocephalus. Results: Fourteen days after transplantation, hydrocephalic hyh mice with BM-MSC showed lower ventriculomegaly. In these animals, BM-MSC were found undifferentiated and spread into the periventricular astrocyte reaction. There, BM-MSC were detected producing several neuroprotector factors (BDNF, GDNF, NGF, VEGF), in the same way as reactive astrocytes. Total neocortical levels of NGF, TGF-β and VEGF were found increased in hydrocephalic hyh mice transplanted with BM-MSC. Furthermore, astrocytes showed increased expressions of aquaporin-4 (water channel protein) and Slit-2 (neuroprotective and anti-inflammatory molecule). Conclusions: BM-MSC seem to lead to recovery of the severe neurodegenerative conditions associated to congenital hydrocephalus mediated by reactive astrocytes.Universidad de Málaga. Campus de Excelencia Internacional Andalucía Tech. PI15/0619 (ISCIII/FEDER

External Factors of the Armenian-Azerbaijani Conflict in the Context of the Second Karabakh War

Aim. To identify the features of the behavior of external actors in the South Caucasus during the Second Karabakh War and rank them according to the degree of influence on the events, outcomes, and settlement of the post-conflict situation.Tasks. To find out the main reasons for Armenia’s military defeat, as well as the extent of involvement in the armed conflict and post-conflict settlement of Turkey, Great Britain, Iran, the USA, France, the OSCE Minsk Group and the EU.Methods. Among the techniques and ways to achieve the stated goal of the study, the methods of comparative analysis, which allowed by comparing the degree of involvement and role in the conflict to identify beneficiaries and the most promising applicants for participation in post-conflict settlement; structural and functional analysis aimed at identifying connections, relationships and mediations between the participants of the events under consideration.Results. The analysis of the interested and motivated behavior of Turkey, Iran, the UK, the USA, France, the Minsk Group, and the EU in the 44-day armed conflict between Armenia and Azerbaijan was carried out. An attempt is made to rank external actors according to the degree of influence on the course and outcome of the war; the main reasons for Armenia’s military defeat are established; Iran’s behavior and role in the conditions of war and post-conflict settlement are characterized; Azerbaijan’s support in the conflict by the countries of the Turkic Council is shown; the involvement of Turkey and Great Britain in the war is established; The role of Russia in the end of the war was determined; the positions of the USA and France as co-chairs of the OSCE Minsk Group were clarified; the EU’s application for mediation in the settlement of the Armenian-Azerbaijani contradictions was assessed.Conclusions. Contrary to numerous opinions about the paralysis of Russia’s political will in the South Caucasus, it was Russia that, following the results of the Second Karabakh War, managed to strengthen its position and role in regional politics, unite its allies — Armenia and Azerbaijan — around it, inspire them with an understanding of the need to end armed confrontation in the conflict zone, and propose a realistic program of joint actions towards its political settlement

Оценивание гравитационных моделей международной торговли: обзор основных подходов

Gravity models, which relate volume of exports from one country to another to the economic size of those countries and various trade costs, have long been successfully used in empirical analysis of international trade flows and their determinants. Recent decades saw a substantial increase in a number of methods to estimate such models due to the emergence of theoretically founded modifications of the gravity equation. This paper surveys these advances in the estimation methodology. First, alternative techniques to account for structural multilateral resistance terms (introducing remoteness measures, using price indices, non-linear estimation and its linear approximation, importer and exporter fixed effects) are examined. Variants of gravity specifications on panel data (country-pair fixed and random effects, Hausman-Taylor model) are then reviewed. Next, common errors in gravity modeling associated with atheoretical calculations of bilateral trade and economic size variables are analyzed. Finally, ways to consistently estimate gravity models in the presence of zero trade flows using Poisson regression, Tobit and Heckman models are discussed. All the methods considered have their own advantages and drawbacks. The choice of estimator in an application is not obvious, and depends on properties of available data and goals of research. A good practice in the modern empirical literature is to utilize simultaneously several techniques, at least for robustness checks

Characterization and administration of bone marrow-derived mesenchymal stem cells in an animal model of congenital hydrocephalus

Bone marrow-derived mesenchymal stem cells (BM-MSC) are considered as a potential therapeutic tool in neurodegenerative diseases, due to their ability to migrate to degenerated tissues and the production of growth factors. Congenital hydrocephalus is a disorder characterized by a degeneration of the periventricular cerebral parenchyma and the white matter. In the present study, using an animal model of congenital hydrocephalus, the hyh mouse, it has been studied the capacity of the BM-MSC to reach the degenerated regions exhibiting glial reactions and their probable neuroprotector effects. The BM-MSC were isolated from two sources: a) transgenic mice expressing the monomeric red fluorescent protein (mRFP1); b) wild type mice. In the second case, the BM-MSC were labelled in vitro using bromodeoxyuridine, a fluorescent cell tracker and the lipophilic DiR. Before application, the cells were analysed using flow cytometry and immunofluorescence. The BM-MSC were injected into the retro-orbital sinus or into the lateral ventricle of hyh mice. After 24/96 hours of administration, they were detected under light, confocal and electron microscopes. The injected BM-MSC reached the degenerated periventricular regions and the disrupted neurogenic niches. They were detected in the periventricular parenchyma, around periventricular blood vessels and in the ventral meninges. Most of the applied BM-MSC expressed the glial cell-derived neurotrophic factor (GDNF), in the same way as the periventricular reactive astrocytes, suggesting a possible neuroprotector effect.Universidad de Málaga, Campus de Excelencia Internacional Andalucía Tech. Instituto de Salud Carlos III, PI12/0631 con cofinanciación FEDER