Labor indicators and manufacturing companies ownership patterns in Russia and its regions: results of quantitative analysis

Main Article Content

Vladislav Spitsin
Alexander Mikhalchuk
Irina Pavlova
Alexander Mikhalchuk
Irina Pavlova
Lubov Spitsina

Abstract

Research background: There has been an extensive process of foreign and joint ownership enterprises establishment in the Russian economy since 2006. Domestic manufacturing industry has been experiencing certain pressure on behalf of foreign direct investment bringing new technologies and higher labor requirements.


Purpose of the article: The aim of this paper is to investigate differences in employment strategies and labor indicators in the case of enterprises in foreign and joint ownership (FJO) and domestic enterprises in Russian ownership (RO). We analyze the manufacturing industry in Russia and its regions under conditions of stable and crisis periods.


Methods: The study enhances the analysis of Rosstat’s statistical data for 2005–2016 and applies ANOVA method to compare the employment results for companies with different ownership patterns. The research is carried out both at the national level of the Russian Federation and at the regional level according to the regions.


Findings & Value added: The study identifies significant decline in employment and in-crease in productivity for the period of 2005–2016. In contrast to the crisis of 2008–2009, in 2014–2016 there has been no sharp drop in employment. However, there is a substantial decline in real salaries which is comparable to the crisis of 2008-2009. According to ANOVA, statistically significant differences in labor indicators between FJO and RO companies are manifested. RO companies dominate in employment and payroll funds, while FJO enter-prises have better productivity results with a higher average salary. FJO companies demonstrated faster growth in employment and payroll fund in relatively stable conditions (2012–2013). However, they reacted with a significant reduction in employment for a new crisis (2014–2016), although the creation of new FJO enterprises continued in separate regions of Russia. The results can be used in social policy to regulate the employment and earnings of industrial workers in the current economic conditions.

Article Details

How to Cite
Spitsin, V., Mikhalchuk, A., Pavlova, I., Mikhalchuk, A., Pavlova, I., & Spitsina, L. (2018). Labor indicators and manufacturing companies ownership patterns in Russia and its regions: results of quantitative analysis. Oeconomia Copernicana, 9(2), 261-285. https://doi.org/10.24136/oc.2018.014
Section
Articles

References

Aitken, B. J., & Harrison, A. E. (1999). Do domestic firms benefit from direct foreign investment? Evidence from Venezuela. American Economic Review, 89(3). doi:10.1257/aer.89.3.605.
Analytical Center under the Government of the Russian Federation. (2016). Employment, income and personal consumption: regional differences. Socio-economic crisis in Russia Bulletin. Retrieved from: http://ac.gov.ru/files/publi cation/a/9465.pdf (28.02.2017).
Antonescu, D. (2015). Empirical analysis of foreign direct investments at NUTS 2 region, in European Union and Romania. Procedia Economics and Finance, 22. doi: 10.1016/s2212-5671(15)00284-1.
Barnes, J., Kaplinsky, R., & Morris, M. (2004). Industrial policy in developing economies: developing dynamic comparative advantage in the South African automobile sector. Competition & Change, 8(2).
Bellak, C. (2004). How domestic and foreign firms differ and why does it matter? Journal of Economic Surveys, 18(4). doi: 10.1111/j.0950-0804.2004.00228.x.
Buys, A. (2010). Ownership and innovative behavior. The case of South African automotive component manufacturing industry. Proceeding Technology Management for Global Economic Growth (PICMET): 1-9.
Charles, K. K., Hurst, E., & Schwartz, M. (2018). The transformation of manufacturing and the decline in U.S. employment. SSRN Electronic Journal. doi: 10.2139/ssrn.3154376.
Chen, Z., Ge, Y., & Lai, H. (2011). Foreign direct investment and wage inequality: evidence from China. World Development, 39(8). doi: 10.1016/j. worlddev.2010.12.006.
Decreuse, B., & Maarek, P. (2015). FDI and the labor share in developing countries: a theory and some evidence. Annals of Economics and Statistics, 119/120. doi: 10.15609/annaeconstat2009.119-120.289.
Dogaru, T., Burger, M. J., Karreman, B., & van Oort, F. G. (2014). Functional and sectoral division of labour within Central and Eastern European countries: evidence from Greenfield FDI. SSRN Electronic Journal. doi: 10.2139/ssrn.2417250.
Eurostat Statistics Explained. (2016). Glossary: statistical classification of economic activities in the European Community (NACE). Retrieved from: http://ec.europa.eu/eurostat/statistics-explained/index.php/Main_Page (24.02.2017).
Fiorini, M., Hoekman, B., & Malgouyres, C. (2016). Services policy reform and manufacturing employment: evidence from transition economies. SSRN Electronic Journal. doi: 10.2139/ssrn.2879325.
Gaidar Institute for Economic Policy. (2016). Real-time monitoring of the economic situation in Russia: trends and challenges for socio-economic development. Retrieved from: http://iep.ru/files/text/crisis_monitoring/2016_2-20_februa ry.pdf (27.02.2017).
Girma, S. (2005). Safeguarding jobs? Acquisition FDI and employment dynamics in U.K. manufacturing. Review of World Economics, 141(1). doi: 10.1007/s10290-005-0020-1.
Girma, S., Thompson, S., & Wright, P. W. (2002). Why are productivity and wages higher in foreign firms? Economic and Social Review, 33(1).
Gurkov, I., Kokorina, A., & Saidov, Z. (2017). The cul-de-sac of foreign industrial investments to Russia. Post-Communist Economies, 29(4). doi: 10.1080/14631377.2017.1339536.
Hanousek, J., Kočenda, E., & Maurel, M. (2011). Direct and indirect effects of FDI in emerging European markets: a survey and meta-analysis. Economic Systems, 35(3). doi: 10.1016/j.ecosys.2010.11.006.
Huang, C.-H., & Yang, C.-H. (2016). Ownership, trade, and productivity in Vietnam’s manufacturing firms. Asia-Pacific Journal of Accounting & Economics, 23(3). doi: 10.1080/16081625.2016.1188449.
Institute of World Economy and International Relations of the Russian Academy of Sciences. (2015). Russia and the World: 2016. Annual Forecast: Economy and Foreign Policy. Retrieved from: http://www.imemo.ru/files/File/ru/publ/ 2015/2015_024.pdf (27.02.2017).
Iwasaki, I., Mizobata, S., & Muravyev, A. (2018). Ownership dynamics and firm performance in an emerging economy: a meta-analysis of the Russian literature. Post-Communist Economies, 30(3). doi: 10.1080/14631377.2018.1442036.
Javorcik, B. S. (2004). Does foreign direct investment increase the productivity of domestic firms? In search of spillovers through backward linkages. American Economic Review, 94(3). doi: 10.1257/0002828041464605.
Jenkins, R. (2004). Globalization, FDI and employment in Viet Nam. Transnational corporations. UNKTAD, 15(1). doi: 10.1080/ 1024529042000271416.
Jude, C., & Pop Silaghi, M. I. (2015). Employment effects of foreign direct investment. New evidence from Central and Eastern European countries. SSRN Electronic Journal. Retrieved from: https://papers.ssrn.com/sol3/papers.cfm? abstract_id=2607520 (27.02.2017).
Karpaty, P., & Bandick, R. (2007). Foreign acquisition and employment effects in Swedish manufacturing. SSRN Electronic Journal. Retrieved from: https://papers.ssrn.com/sol3/papers.cfm?abstract_id=1030512 (27.02.2017).
Lenart, Ł., Mazur, B., & Pipień, M. (2016). Statistical analysis of business cycle fluctuations in Poland before and after the crisis. Equilibrium. Quarterly Journal of Economics and Economic Policy, 11(4). doi: 10.12775/EQUIL.2016.035.
Mehta, S. (2016). Innovation and employment: a study of Indian manufacturing sector. Millennial Asia, 7(2). doi: 10.1177/0976399616655032.
Nazarczuk, J., & Krajewska, A. (2018). Local determinants of foreign direct investment in Poland: the role of relative distance. Equilibrium. Quarterly Journal of Economics and Economic Policy, 13(1). doi: 10.24136/eq.2018.004.
Onaran, O. (2008). Jobless growth in the Central and East European countries: a country-specific panel data analysis of the manufacturing industry. Eastern European Economics, 46(4). doi: 10.2753/eee0012-8775460405.
Pietrucha, J., Żelazny, R., Kozłowska, M., & Sojka, O. (2018). Import and FDI as channels of international TFP spillovers. Equilibrium. Quarterly Journal of Economics and Economic Policy, 13(1). doi: 10.24136/eq.2018.003.
Próchniak, M. (2011). Determinants of economic growth in Central and Eastern Europe: the global crisis perspective. Post-Communist Economies, 23(4). doi:10.1080/14631377.2011.622566.
Robertson, G. B., & Teitelbaum, E. (2011). Foreign direct investment, regime type, and labor protest in developing countries. American Journal of Political Science, 55(3). doi: 10.1111/j.1540-5907.2011.00510.x
Russian Federal State Statistics Service (2017). United Interdepartmental Statistical Information System. Retrieved from: http://www.fedstat.ru /indicators/start.do. (24.02.2017).
Spitsin, V. V., Mikhalchuk, A. A., Spitsina, L.Yu., Shabaldina, N. V., & Novoseltseva, D. A. (2015). Comparative analysis of economic and social results of foreign and domestic firms: case Russian electronic industry. In International Business Information Management Association conference, IBIMA: 26th International Conference. Madrid: IBIMA.
Spitsin, V. V., Mikhalchuk, A. A., Spitsina, L. Yu., Tyuleneva, N. A., & Novoseltseva, D. A. (2016). Manufacture of transport equipment. social results of domestic and foreign firms: case manufacture of transport equipment in Russia. International Journal of Economics and Financial Issues: International Academic Journal, 6(1).
Spitsin V. V., Mikhalchuk A A., Chistyakova N. O., & Spitsina L. Yu (2018). Development of innovative industries in Russia under unfavourable external environment. Equilibrium. Quarterly Journal of Economics and Economic Policy. 13(3).
Staehr, K. (2017). Capital flows and growth dynamics in Central and Eastern Europe. Post-Communist Economies, 30(1). doi: 10.1080/14631377.2017.136219.
Temouri, Y., Driffield, N. L., & Añón Higón, D. (2008). Analysis of productivity differences among foreign and domestic firms: evidence from Germany. Review of World Economics, 144(1). doi: 10.1007/s10290-008-0136-1.
Unified Interdepartmental Statistical Information System (UniSIS), Russia. (2017). Retrieved from: http://www.fedstat.ru/indicators/start.do (28.07.2017).
Varblane, U., Mickiewicz, T., & Radosevic, S. (2002). The value of diversity: foreign direct investment and employment in Central Europe during economic recovery. SSRN Electronic Journal. Retrieved from: https://papers.ssrn.com/sol3/papers.cfm?abstract_id=418541 (28.07.2017).
Vukšić, G. (2015). Effects of private ownership, trade, and foreign direct investment on labor productivity growth in transition economies: evidence from the Croatian manufacturing industry. Emerging Markets Finance and Trade, 52(2). doi: 10.1080/1540496x.2015.1011540.
Wang, J., & Wang, X. (2015). Benefits of foreign ownership: evidence from foreign direct investment in China. SSRN Electronic Journal. Retrieved from: https://papers.ssrn.com/sol3/papers.cfm?abstract_id=2581295. (28.07.2017).
Yucel, G. E. (2014). FDI and economic growth: the case of Baltic countries. Research in World Economy, 5(2). doi:10.5430/rwe.v5n2p115
Zemtsov S. P., Pavlov, P. N., & Sorokina, A. V. (2016). Specifics of cluster policy in Russia. Equilibrium. Quarterly Journal of Economics and Economic Policy,11(3). doi: 10.12775/EQUIL.2016.023.