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Article
Stability of Densities for Perturbed Diffusions and Markov Chains

Konakov V., Kozhina A., Menozzi S.

ESAIM: Probability and Statistics. 2017. Vol. 21. P. 88-112.

Article
The Minkowski central partition as a pointer to a suitable distance exponent and consensus partitioning

Mirkin B. G., Amorim R., Makarenkov V. et al.

Pattern Recognition. 2017. Vol. 67. P. 62-72.

Article
Criteria importance theory for multicriterial decision making problems with a hierarchical structure

Podinovskaya O. V., Vladislav V. Podinovski.

European Journal of Operational Research. 2017. Vol. 258. P. 983-992.

Article
Habit formation in consumption: A meta-analysis

Havranek T., Rusnak M., Sokolova A.

European Economic Review. 2017. Vol. 95. No. June. P. 142-167.

Article
2D:4D and lifetime educational outcomes: Evidence from the Russian RLMS survey

John V.C. Nye, Maksym Bryukhanov, Sergiy Polyachenko.

Personality and Individual Differences. 2017. Vol. 112, 1 July 2017. P. 62-66.

Article
Tight Money and the Sustainability of Public Debt

Pekarski S. E.

International Journal of Central Banking. 2017. Vol. 13. No. 1. P. 191-223.

Article
Does biological endowment matter for demand for financial services? Evidence from 2D:4D ratio in the Russian household survey

Semenova M., Andrievskaya I.

Personality and Individual Differences. 2017. Vol. 104. P. 155-165.

Article
Agency Problem and Ownership Structure: Outside Blockholder As a Signal
In print

Stepanov S., Suvorov A.

Journal of Economic Behavior and Organization. 2017. No. 133. P. 87-107.

Article
The effects of prenatal testosterone on wages: Evidence from Russia

Nye J. V., Bruhanov M., Kochergina E. V. et al.

Economics and Human Biology. 2017. Vol. 24. P. 43-60.

Article
Values and Corruption: Do Postmaterialists Justify Bribery?

Kravtsova M., Oshchepkov A. Y., Welzel C.

Journal of Cross-Cultural Psychology. 2017. Vol. 48. No. 2. P. 225-242.

Undergraduate Research

Student Research Contest Winners

Undergraduate Program in Economics Research Papers

Joint HSE NES Program in Economics Research Papers

Career Lab

Alumni in Academia

 

Student Research Contest Winners
 
Anna Denisenko
Paper advisor: Dmitry Dagaev
Political competition as the game of Colonel Blotto
Winner of 2016 contest
Vadim Drobinin 
Thesis advisor: Mikhail V.Ulyanov
Stock Markets Indicators Forecasting Algorithms Research Based on Social Networks 
Winner of 2016 contest

Undergraduate Program in Economics Research Papers, class 2016 
 
During the last term of study at the Faculty of Economic sciences all students, including undergraduates are required to write and present their research thesis. This, along with certain number of credits and courses is a graduation requirement. Here at this page we list examples of undergaduate students' theses that illustrates the diversity of research opportunities at the Faculty of Economic Sciences. 
 
Evdokimov Sergei
Features of M&A deals in the video game industry
The most important papers of the last few years include empirical studies on value creation determinants of companies and the efficiency of mergers and acquisitions (M&A). Unlike existing studies that mainly investigate the effect of the company’s financial performance and quality characteristics of M&A transactions on the value of the target company, this paper evaluates and measures the influence of industry-specific factors of video game market (including market segment, supported gaming platform and the company's product line) on company’s value. Based on the analysis of analytical reports and scientific research on video games, a comprehensive classification for the market players was developed in order to conduct this investigation. In addition, an efficiency analysis of M&A transactions in the video game market is presented in the paper. In particular, the study uses linear regression and event analysis methods to measure the impact of industry-specific factors and the effectiveness of transactions respectively. The results of the regression models  not only confirm the importance of industry-specific factors, but also provide a better estimate of valuation multiple (EV/Revenue) as compared to the simple use of such classic qualitative and financial characteristics of transactions as the type of investor (strategic or financial), the target company's EBITDA margin, etc. Particularly, the following facts were revealed: 
·    video game developers and operators are valued at premium in comparison with other market participants; 
·    companies engaged in the production or maintenance of multiplayer online games get the highest valuation in the market. 
Meanwhile, the results of event study analysis, which examines the behavior of firms’ stock prices around corporate events, show a steady upward trend in stock returns of acquirers after the announcement of deals. These results are consistent through different methods of measuring post-offering abnormal stock returns.
 
Anastasiia Faiikina
Thesis Advisor: Kosmas Marinakis
Peer Effects and Dishonest Behavior in the Individual Projects
This paper presents a theoretical model of the agent’s optimal decision between honest behavior and cheating in the individual projects while being located in peer environment. I construct the model using a classical principal–agent relationship given a possibility of cheating that has not been properly analyzed before. I consider two different settings, cheating as a crime of opportunity and a simultaneous decision about efforts and cheating, which give the same intuitive results. The conclusions of my model suggest that higher able agents, who are more productive in honest efforts and more adherent to social norms, have a significantly lower probability of being engaged in cheating behavior. At the same time, the principal can also reduce the level of cheating through an increase of a size of the punishment or manipulation of risks. The most interesting solution of the problem of cheating is a creation of atmosphere of peer trust since agents always refer to the behavior of others. A possible illustration of the model is a problem of cheating by students whose decisions are very consistent with the implications of the model due to my empirical analysis.
Keywords: Cheating, compensation scheme, contract theory, efforts, incentives, peer effects, peer trust, performance evaluation, social learning
 
Anastasiya Glinskaya
Thesis Advisor: Elena Buyanova
Building an Investment Portfolio on the Russian Stock Market
A method of construction an efficient portfolio and the choice of investment strategy is always a live issue for investors. In this paper building the optimal portfolio on the Russian stock market with application of the Elton-Gruber-Padberg algorithm is investigated. This algorithm makes it possible not only to calculate the weights of securities in the portfolio, but also to determine by Treynor ratio the shares of which companies from the total sample have to be the part of the portfolio. Within the framework of this project several portfolios are formed taking into account both long and short sales and followed by the application of active and passive management strategies. The obtained results allow to make a conclusion about the effectiveness of the EGP algorithm on the Russian stock market.
 
Anna Malova
Thesis Advisor: Ksenia Panidi
The Effect of Social Skills on The Link Between Volunteering and Income
In this research I study the interaction of social skills gauged by means of five personality traits, hours spent on performing unpaid work, and the income level. I suggest a way to separate those volunteers who are guided by the consumption model from those guided by the investment one on the grounds of their charitable money donations. I assume that the consumption theory driven volunteers also contribute to society through money donations, while the investment specification driven volunteers do not give their money to charity. The results of the probit regressions suggest that volunteers of different motivations are indeed driven by different personal characteristics: consumption volunteers are extraverted and organized, while investment volunteers are agreeable. Further analysis is conducted using the two-stage least squares regression, since the usage of the Heckman-correction model was empirically proved to be unnecessary. The analysis demonstrated that investment volunteers have their average income level shifted downwards if measured in the same year, thus confirming the idea that to have higher income in the future they pay more attention to volunteering today. Also, consumption volunteers perform unpaid work more if they have very high or very low income level due to income and substitution effects. The most important fact is that volunteering is not paid out in the future under either specification, although it is fair to notice that in the investment model people do obtain higher wage rates due to several personality characteristics they possess (agreeableness and organization), while these features are not significant when talking about wages of consumption volunteers.
 
Arshak Minasyan
Thesis Advisor: Vladimir Skpokoiny
Alternating Least Squares in Generalized Linear Models
We derived a convergence result for a sequential procedure known as alternating maximization (minimization) to the maximum likelihood estimator for a pretty large family of models ——- Generalized Linear Models (GLMs). Alternating procedure for linear regression becomes to the well-known algorithm of Alternating Least Squares (ALS), because of the quadraticity of log-likelihood function $L(\bm{v})$. In GLMs framework we lose quadraticity of $L(\bm{v})$, but still have concavity due to the fact that error-distribution is from exponential family (EF). Concentration property makes the Taylor approximation of $L(\bm{v})$ up to the second order accurate and makes possible the use of ALS technique. Moreover, finite sample Fisher expansion was proved for GLMs. Examples and experiments confirm convergence result followed by the discussion of the importance of initial guess.
 
Anna Stepashina
Thesis Advisor: Kantorovich G.G.
The Impact of Oil Prices on the Profitableness of Oil Companies Stocks in Russia
The present study contains an analysis of the crude oil Brent price impact on the Russian stock exchange, in particular on the stock quotes of Lukoil, Gazpromneft, Surgutneftegas, Tatneft, Rosneft companies in the period of 2002-2015, including analysis of subperiods. Stock indexes for Russia (RTS) and the USA (S&P500), exchange rate ruble-US dollar are also included in the model. A literature review on the proposed research question and theoretical background description are provided. In the paper, the following econometric tools are used: augmented Dickey-Fuller test, Johansen cointegration test, vector auto regression (VAR) and vector error correction models (VECM). Additionally, an analysis of periods before and after the 2008 economic crises is conducted. Authors make some conclusions concerning the force of the crude oil prices impact on stock prices of oil companies in Russia. The main result of the study is that the influence of the prices of crude oil on stock quotes is statistically significant for all the companies, except Rosneft. In the case of stock quotes of Rosneft an anomalous behavior and independence from other variables of the model are revealed.
 
Timur Zekokh
Thesis Advisor: Dmitry Malakhov
Testing the CAPM for the Russian Stock Market: A Multivariate GARCH Approach
Calculation of cost of equity is one of the most urgent problems of corporate finance. Even now, the debate continues regarding the accuracy of risk assessment techniques and the construction of the required return models. In this study the classic CAPM, Zero-Beta CAPM, DCAPM, and ECAPM are tested on the Russian stock market for 2006-2015 using the multivariate GARCH model on daily, weekly and monthly returns.
 
Zhiganov Alexander
Thesis Advisor: Menshikov Sergey
Market Over- and Underreaction on News
In this work, the phenomenon of unusual reactions on financial markets is examined. More precisely, the hypothesis of overreaction on Russian financial market is tested; the object of the research is shares prices dynamics of companies that have been included in RTS list for the last 12 years. Methods of testing are connected with CAR and BHR returns and ARIMA-modelling. The resulting hypothesis confirmation is reached with all three methods; the overreaction exists on the market and can be used to obtain above-market benefits by correcting trade strategies. The research has both immediate practical implementations and options for further development.
 
Ivan Aleshko
Thesis advisor: Maria Kokoreva
Capital Structure Choice of Retail Companies in Developed Financial Markets 
A great number of empirical research papers have investigations in relation to capital structure. However, there is no research towards capital structure determinants of retailers. Retail is seen as a quite attractive industry to study. P&L and balance sheet are more visible and, hence, there are less troubles caused by valuation comparing with companies having business focus on services or manufacturing. Also, retail firms provide more opportunities to compare them due to industry specifics.
The paper provides the analysis of capital structure determinants within a dynamic panel data set of 60 retail companies in the USA, Canada and Europe dating 2010-2015. Here we examine support for the trade-off theory and it partially found through the analysis. There is a dynamic partial adjustment model estimated with a two-step system GMM estimator provided by Blundell-Bond.
The results obtained suggest that retailers adjust towards their target capital structure with 41.39% level of speed annually. Overleveraged firms adjust faster than underleveraged and the whole sample suggests the adjustment costs arising from deviating from target to be high. Industry characteristics appear to be significant in terms of influencing on adjustment speed level.

Alexandra Dubynina
Thesis advisor: Marina Kolosnitsyna
Factors of Life Satisfaction in Old Age
Russia, along with many other countries of the world, is experiencing a phenomenon of population ageing. The proportion of the elderly is growing while life expectancy increases and birth rate declines. The population ageing sets a series of social and economic issues faced by modern society. By the same token, this process provides society with plenty of opportunities, the benefits of population ageing may even be used for economic growth. And the economic potential of seniors may be implemented in the most successful way mainly by the life-satisfied elderly.
Thus the aim of the present study is to determine factors of life satisfaction among older people. In order to identify the determinants of life-satisfaction ordered logistic regression model and binominal logistic regression model were estimated using data for the elderly aged 60 years and over from longitudinal study SAGE for Russia. Following results should be mentioned as obtained: life-satisfactions significantly positively correlated with self-rated health status, level of income, education, pension payment, often meetings with friends and feeling of safety at home and outside.

Alexander Levkun
Thesis Advisor: Martin Janssen
A Comparison of Different Multi-object Auctions
In multi-object auctions, a bidder can be guided by desire to substantially raise rivals' costs of obtaining their winning units. In this paper bidding behavior and allocative efficiency are explored under standard and spiteful preferences. Three auction mechanisms are examined: an ascending uniform-price clock auction (clock auction), a combinatorial clock auction (CCA) and Vickrey auction as a theoretical benchmark (VCG). Under standard preferences, the clock auction and CCA (almost always) are inefficient because of demand reduction and demand expansion, respectively. Under spiteful motive, in the clock auction demand reduction aggravates, whereas the allocation becomes more efficient. In VCG-like  mechanisms bidders are able to strategically manipulate the price the rival pays for her winning units.

Kirill Ponomarev
Thesis advisor: Oleg Zamulin
Comparison of the Effect of Oil Price Depreciation on the Russian Economy in 2008 and 2014
This paper compares two recessions of 2008-2009 and 2014-2015 which Russian economy recently faced. They brings a lot of questions. The paper considers the impact of terms of trade shocks on the economy's performance under different exchange rate regimes. A scenario analysis shows that floating exchange rate regime mitigates the impact of the shocks and allows Russian economy to adjust to these shocks better.

 Anna Tereshchenko
Thesis advisor: Anastasia Stepanova 
Corporate Governance, Insider Ownership and Risky Investments in R&D Projects: Developed and Emerging Markets
In the research we studied the influence of corporate governance and insider ownership on corporate risky R&D investment intensity. We analyzed companies from pharmaceutical and biotechnological industries because risky investments are extremely important in these sectors. Empirical evidence shows that corporate governance factors and insider ownership influence risky R&D investments in a different way in developed and emerging markets.  Proportion of independent directors is associated with lower R&D investment intensity in developed markets. As R&D investments are extremely high in developed markets, we suppose that overinvestment problem can exist. Thus, better corporate governance can decrease the investments closer to optimal level. In emerging markets proportion of independent directors positively connected with R&D investments. Such results can be explained by the fact that independent directors monitor risk-averse managers that underinvest in risky, but perspective projects. CEO-Chairman separation does not significantly influence R&D investments. This result can be achieved because personal characteristics of managers are different and there is no clear pattern of the separation effect. We can also suppose that both CEO and Chairman of the Board tend to be rather risk-loving in pharmaceutical and biotechnological industries, and separation have no effect on risky investments.  Insider ownership also have no significant influence on R&D investments. Such result can be explained by the fact that not all the insiders can influence investment process. Moreover, beneficial owners can lack industry specific knowledge that allow them to monitor the process.  Analysis also shows that companies with higher proportion of independent have more collaborations with scientific institutions in emerging markets. In developed markets these factors are not connected.
 
Undergraduate program in Economics Research Papers, class 2015 
 
During the last term of study at the Faculty of Economic sciences all students, including undergraduates are required to write and present their research thesis. This, along with certain number of credits and courses is a graduation requirement. Here at this page we list examples of undergaduate students' theses that illustrates the diversity of research opportunities at the Faculty of Economic Sciences. 

Andrej Zubanov
Thesis Advisor: Leonid Polischuk
Incentives to Contribute to Club Goods
The paper describes an economy with one club and a congestible club good which is produced from voluntary donations of club members and enjoyed by club members only. Agents in the economy are heterogeneous in their value of the club good. We show that in such an economy multiple equilibria are possible and a membership fee, which are withdrawn from the economy, may have a positive impact on the number of contributors and can improve the volume of donations. The effect is attained because membership fees make agents who value the collective good less stay out of the club, hence, preventing crowding and improving incentives of club members to donate. Thus, membership fees help to mitigate the free-rider problem in heterogeneous clubs with a congestible club good.

Yana Myachenkova
Thesis Advisor: Anton Suvorov
The Effect of Rewards on Intrinsic and Extrinsic Motivation
Does positive feedback lead to deterioration in the next performance and in order to achieve the best possible outcome one should opt for using negative incentive instruments? This paper analyzes which policy of reinforcement is the most efficient with the use of agent principal game. The experimental design includes different possibilities for the principal to motivate the agent. It is shown that being rewarded boosts personal motivation to invest more efforts in the future, while negative feedback has no significant impact on the future efforts. However, after receiving positive feedback the agent’s performance level is more likely to be lower due to the "regression to the mean" effect. The results also show that a propensity to send good or bad messages significantly influences the information revealed.
 
Joint HSE NES Program in Economics Reseach Papers, class 2016
 
During the last term of study at the Faculty of Economic sciences all students, including undergraduates are required to write and present their research thesis. This, along with certain number of credits and courses is a graduation requirement. Here at this page we list examples of undergaduate students' theses that illustrates the diversity of research opportunities at the Faculty of Economic Sciences. 

Artem Akselrod
Thesis Advisor: Natalya Volchkova
The Impact of Exchange Rate Change on Exporters Behavior
This paper examines firm export behavior under exchange rate changes depending on import share in its total costs. Export and import real effective exchange rates for more than 80 industries are created on the basis of Russian State Customs Declarations for  2008-2011. Using estimator which allows to control for fixed effects and error clustering the paper finds that firms with high import shares in total firm costs weaker adjust volume of export in total firm revenues in response to exchange rate change. Firm productivity is found to have positive influence on firm export share. Robustness checks with different approaches to estimation confirm results of the main estimation.

Anastasia Andreeva
Thesis Advisor: Oleg Shibanov
Construction of the Optimal Portfolio from Russian Assets
This paper presents the first comprehensive empirical study on the optimal investment portfolio construction in the Russian market. I construct ten optimal portfolios for the period 2007-2016 from stocks, bonds and Exchange Traded Funds traded on the Moscow Exchange. I consider the liquid, inexpensive, alive, long-existing assets with no zero historical quotes. Only the assets available to ordinary Russian investors with the wealth of at least 100 000 rubles are included in the analysis. The research is based on the Modern Portfolio Theory, and the Sharpe ratio is the base performance measure. This core model has several extensions to validate the results. The most important extension consists in the introduction of the realized returns. The ex ante optimal portfolios constructed in this paper outperform the MICEX index even after the transaction costs are added. The ex post portfolios outperform the market mostly when the latter rises. Both ex post and ex ante portfolios generally outperform the naive strategy and confirm the improvement of the performance when the ETFs are added.

Pavel Bacherikov
Thesis Advisor: Oleg Shibanov
Does It Pay to Pay Your Fund Manager? New Evidence on Side-by-side Management and U.S. Alternative Mutual Funds
The paper investigates the impact of simultaneous management of hedge funds and U.S. alternative mutual funds (a practice known as side-by-side management) on the risk-adjusted performance of the latter. Using a unique dataset, resulted from merging Lipper and Morningstar’s hedge fund databases with CRSP and Morningstar’s on-shore mutual fund databases, and subsequent matching with corresponding mandatory SEC filings, I find that mutual funds, managed side-by-side with hedge funds by individual fund managers, significantly outperform their unaffiliated peers by 1.6 to 2.76 pp. annually. Moreover, the positive effect persists even after the abolishment of side-by-side affiliation, suggesting that the detrimental impact of managers' favoritism is of no concern for mutual fund investors. Besides, there is also evidence that mutual funds with higher inflows are more likely to continue being side-by-side affiliated, whereas those operating within larger families (in terms of total net assets) are less likely to continue as side-by-side managed.

Anastasiia Bochkovskaia
Thesis Advisor: Shlomo Weber
The Impact of Languages’ Grammatical Structure on Regional Economic Development
There are more than 7,000 living languages in the world. Starting from Edward Sapir and Benjamin Lee Whorf, scholars were determined to explore the ways in which numerous differences in languages influence thinking and habits of their speakers. Vocabulary, speech rate, the direction in which the language is written were listed as potential sources of behavioral distinctions among nations. In addition to these dissimilarities, languages vary grammatically in terms of the word order they employ. In this paper, I explore the link between this language feature and regional economic development. I argue that different behavioral patterns emerge, leading nations to different economic outcomes, depending on whether a language has a preferred word order, and which of the three components – subject (S), object (O), or verb (V) – it puts in the first place in a sentence. I find that countries which speak languages with no dominant order exhibit higher levels of GDP per capita, although for official languages, SVO or SOV order is more preferable. This result is consistent with recent psycholinguistic findings. Finally, I conduct a robustness check using another proxy for the economic development – nighttime lights visible from space obtained from the Defense Meteorological Satellite Program’s Operational Linescan System (DMSP-OLS). However, after controlling for the historical relatedness of languages, results become statistically insignificant.

Ksenia Cherepnina
Thesis Advisor: Ksenia Panidi
If I Were You: Self-Other Differences in Risk Taking
People who aren’t directly affected by the outcome of their actions take many social and economic decisions.  Such decisions do usually involve some level of risk and uncertainty that hinders decision-making. The milestone here is that subjects’ decisions on behalf of stakeholders do not necessarily match the ones taken for self. The experimental estimation of reasons behind self-other discrepancies in risk taking is the core issue of this paper. Here I show that on average risk-averse people take higher risks when managing someone else’s money, while risk-seeking subject’s behavior remains unclear. Risk attitudes differences between beneficiary conditions could be explained by loss and inequity aversion. Decreased loss aversion partially accounts for rise in risk-taking in loss domain. Moreover, the majority of participants are also motivated by fairness considerations. Sensitivity to differences in wealth compensate the effect self-other bias has on risk aversion – inequity aversion makes people less risk seeking when managing someone else’s money.  Overall, results demonstrate that beneficiary has strong effect on risk attitudes. Moreover, loss and inequity aversion influence the differences in risky behavior on behalf of other. I anticipate this study as a starting point for further research on self-other bias.

Nadezda Kotova
Thesis Advisor: Andrei Savochkin
Preferences for Fair Wage Distribution
What is the effect of workers' beliefs about fairness on the contracts structure and internal organization of the firm? This study considers agents who perceive the difference in outcomes to be unfair if it comes from pure luck and not their effort. I propose a way to incorporate such agents' concerns into a microeconomics model of the principal-agent type. I consider a setup with one principal and two agents, who are allowed to be heterogeneous in their tolerance towards unfairness. Then I derive the optimal contract and optimal allocation of tasks, which are different in their noisiness. The results show that the principal's surplus is higher when the more tolerant agent works on the task with less noise in the output. I also find that if the difference in the agents' tolerance is large, the more tolerant agent receives higher wage and prefers to work in pairs versus working alone.

Evgeniya Kudinova
Thesis Advisor: Sergey Stepanov
Directors' Reputation Concerns and Decision-Making in Corporations  
This paper studies the effects of the board of directors’ reputation concerns on corporate decision-making. I show that in the absence of any conflict of interest between the manager and shareholders, board’s reputation concerns may harm the firm value through the board’s reluctance to reverse bad projects. However, if the manager’s interests are significantly misaligned with the shareholders’ ones, the reputation concerns may have both positive and negative effects. The negative effect arises from the manager exploiting the board’s unwillingness to reverse bad projects. The positive effect is that the board’s reputation concerns may discipline the manager through demanding a credible proof of the project’s quality from him. I show that the negative effect is more likely to prevail when the board’s reputation concerns are high and the manager’s misalignment is particularly strong. In such a case, the board’s commitment to not interfere in the initial decision-making, while keeping the right to reverse projects at a later stage, increases the firm value by eliminating the impact of reputation.

Ivan Mozharov
Thesis Advisor: Sergey Stepanov
Venture Capitalist Reputation and Portfolio Company Operating Performance
This paper studies the relationship between Venture Capitalists (VCs) reputation measures and a portfolio company’s operating performance. Extending previous studies focused on Return on Assets (ROA) as an operating performance measure, I study ROA drivers: profitability and revenue generation. Using three measures of reputation, I found that reputable VCs are positively associated with a portfolio company’s profitability and revenue generation in the pre- and post-IPO periods. Importantly, I demonstrate that reputable VCs bring value to their portfolio companies by relatively more relying on profitability over revenue generation than less reputable VCs in the pre-IPO period. Positive association of VC reputation with operating performance measures and reliance on profitability over revenue generation stays significant after controlling for VCs’ industry selection skills and self-selection bias, which appeared to be non-significant in my sample. My findings shed more light on a multidimensional impact of value-added activities across reputable and non-reputable VCs and help entrepreneurs better understand value propositions of each VC in a syndicate.

Roman Reshetnev
Thesis Advisor: Oleg Shibanov
Interaction between US and BRICS' Stock Markets: Does the Collapse of Stock Indices in 2015 Cause the Change of Mutual Influence?
This paper explores the interaction between the US, Chinese and other BRICS’ stock markets during the last two decades and the last two years in particular. A majority of previous studies did not identify any substantial increase of the influence of emerging stock markets on US’s ones. However, the collapse of stock indices in 2015 and overall negative effects of growth deterioration in China made me think about possible turnaround point in such a relationship. I conduct the research applying such methods as Granger-causality test, Quandt-Andrews breakpoint test and regression analysis. According to my results, refocusing influence is not observed between the US and China: trading results in China do not significantly affect returns of the US’s indices. The results for other BRICS countries generally turned out to be hard to interpret. Concluding the paper, I point out that the influence of China on developed markets could still grow decently in the near future, backed by its increasing integration into the global financial markets.

Vakatova Irina
Thesis Advisor: Alexey Zakharov
To Shoot or Not to Shoot? Modeling Incentives of Agents in Gun-Free Zones
This is a work on the topic of gun-free zones and their influence on social welfare and public safety, particularly concerned about the US situation. The game-theoretical approach is taken to model the interaction between the law-abiding citizen inside the institution (referred as Student) and potential shooters (referred as Criminal) under both shall-carry laws and gun-free zone implementation on campus, with Social Planner to decide on which option to choose between these two based on social welfare. The results showed the probability of attack on Students to increase with the shift from shall-carry laws to gun-free zone. Almost under no circumstances is that beneficial for Planner to implement the gun-free zone, particularly, in mixed-strategy equilibrium, the one most resembling the real-world situation, it's strictly beneficial for society to guarantee licensed individuals the right to carry weapons for self-protection. Policies affecting the Criminal’s costs in case of an armed attack are found the best to be chosen to both decrease the probability of attack and increase social welfare, while the ones targeting availability of firearms in general seem to produce the opposite effect.

Timofey Volozh
Thesis Advisor: Ksenia Panidi
Goals as Reference Points: a Behavioural Model of Crowdfunding
It is well-known that humans and animals experience an increase of motivation while approaching their goal (Kuppuswamy, Barry, 2015). The funding dynamics of reward-based crowdfunding projects is a convincing evidence for this phenomenon. Thus, according to Kickstarter official statistics, backers (i.e. investors) tend to support a project a lot at its launch and right before its finish, whereas in the middle of a project there is a significant decrease of the number of pledges. In this paper I try to explain this U-shape pattern through presenting a behavioral model of crowdfunding with backers perceiving monetary project goal as a reference point and experiencing emotional loss in case the goal is not reached.

Mikhail Butkov
Thesis Advisor: Dmitry Makarov
Dynamic Competition of Retail and Institutional Investors: Pricing and Volatility
Asset pricing theory offers a number of theoretical models focusing on competition between retail investors on financial markets. However, due to the rapid development of financial markets the institutional trading activity becomes more and more prominent today. In this paper, I examine the fundamental factors influencing the variance of price of a risky asset when both institutional and retail investors are engaged in trading activity. As a result, I have concluded that that the variation of a price is negatively correlated with the risk aversion of small and institutional investors, but positively with the number of large investors engaged in trading activity, as well as with their relative bias parameter and the difference between the expected payoffs of the final dividends. I argue that on the markets, where institutional investors scantly take into account the success of its peers, the variance of stocks would be lower than on those markets, which are populated entirely with small investors.

Yulia Zhestkova
Thesis Advisor: Konstantin Sonin
Catch Me if You Can: Election Manipulation in Non-democracies
Election manipulations are often considered as an integral part of non-democracies and an essential procedure for an incumbent who wants to stay in power. This paper is based on the fact that an incumbent in non-democratic countries has a more effective and durable source of power – political terror. Using a theoretical model, I show that repressions and election fraud appear to be substitutes rather than complements and explore how the effect of political terror accumulates over the time, making election manipulations excessive. The empirical part of the paper exploits the data of election monitoring missions from 1960 to 2014 and shows that a unit increase in political terror scale raises the probability of election fairness by 11 percentage points. Using random forest algorithm, I show that systematic political terror as a method of securing elections' results is mostly used in hybrid regimes. Though a presence of Western observers on elections plausibly affects democratic transitions in many countries, their estimates of election fairness often do not tell much about the real level of democratic development.

Ilya Kozis
Thesis Advisor: Konstantin Sonin
Brain Drain in Non-Democratic Regimes
Empirical studies suggest that human-capital formation is one of the determinants of economic growth. However, there political aspects of human-capital formation are largely neglected in theoretical literature. In my paper, I am trying to incorporate possibility of into model of authoritarian regime, presented in the seminal book of Daron Acemoglu and James Robinson ``Economic origins of dictatorship and democracy.’’ In particular, I use a model with three income groups, where elites dictate their policy to other citizens, while poor and middle class, the latter is also considered to be educated and has a non-negative impact on income of all citizens, can undertake a revolution. Besides that, educated group can also choose to migrate. Presented model, unlike already existing, reflects very well such events as Huguenot Exodus from France in 1685, and Expulsion of Jews from Spain in 1492. Also, I was able to show, that , as a result of more redistributive policy, rather than the ideal policy of elites, is more likely to happen in societies, where inequality between poor and rich is larger.

Evgeni Serebryakov 
Thesis Advisor: Stanislav Khrapov
Prediction of Jump Intensity in Stock Price Dynamics
Here I tried to improve stock volatility prediction with prediction of size and density of price jumps for some stocks. I found several models those predicted jumps better than historical mean. I found that best parameter for jump quantity prediction is term spread. Best parameters for prediction of jumps’ sizes are default spread and last month S & P 500 return. The list of models for predictions is not extensive, which leaves space for future researches.

Alexander Tsyba
Thesis Advisor: Andrei Bremzen
The Effect of Heavy Rail Transit on Socioeconomic Indicators of a City
The purpose of this paper is to analyze rapid heavy-rail systems in largest world cities as graphs (mathematical objects) and to find out whether the complexity of the system influences city socioeconomic indicators as GMP (gross metropolitan product), employment and other variables. The main hypothesis is that well-developed systems are able to decrease transaction costs for a vast number of economic agents in the city and thus increase productivity of the economy. In order to support the hypothesis, I construct 50 graphs based on subways of largest world cities, calculate indices that reflect the complexity of their structure and apply regression methods with inclusion of instrumental variables in order to find relationship with socioeconomic variables. I find that complex systems lead to higher GMP, employment and city’s position in Innovation Cities Index with highly significant coefficients and then conclude that rapid rail transit systems development is one of the integral steps in city development

Telman Shagants
Thesis Advisor: Olga Kuzmina
Does Increased Gender Diversity Produce More Effective Boards of Directors? Evidence from the UK
This paper is devoted to an analysis of the relationship between gender diversity of corporate boards of directors and firm performance, as measured by Tobin's Q. Despite the significant amount of research conducted on this issue, the causal inference is extremely difficult to obtain due to the problem of endogeneity. In this paper I explore the introduction of female gender quotas in the UK in 2010 to extract the impact of exogenous changes to the boards mandated by the quota. By introducing a new instrumental variables approach employing regression discontinuity design, I demonstrate that the increased participation of females in corporate boards could have resulted in a positive impact on firm value. The results call for a closer attention to the problem of women inclusion in boards of directors and inform about the potential benefits which could be obtained by the firms.
 
Joint HSE NES Program in Economics Research Papers, class 2015
 
During the last term of study at the Faculty of Economic sciences all students, including undergraduates are required to write and present their research thesis. This, along with certain number of credits and courses is a graduation requirement. Here at this page we list examples of undergaduate students' theses that illustrates the diversity of research opportunities at the Faculty of Economic Sciences. 

Tamara Arutyunyan 
Thesis Advisor: Paul Dower
The impact of legalizing prostitution on life expectancy and sexual violence
Does legalizing prostitution increase life expectancy and decrease sexual violence? In order  to answer this question I estimate the impact of legalizing prostitution on life expectancy using a panel data set covering 166 countries from 1995 to 2009. I also prepare a case study of Denmark, Germany, the Netherlands, Norway, and Sweden in order to investigate the  effect of legalization on sexual violence. I employ a number of panel data techniques, from the instrumental variable analysis to the synthetic control method. The empirical analysis shows that legalizing prostitution increases life expectancy and decreases the number of reported rape offenses after accounting for other factors. The paper innovates by collecting and aggregating the data on sexual violence in the five countries and studying the link between legalizing prostitution and life expectancy.

Stepan Averin
Thesis Advisor: Patrick Kelly
Default spread as a predictor for European equity market returns
In this paper I study the forecasting properties of the default spread in the Eurozone, the United Kingdom and Germany. This study builds on the findings of Fama and French (1989) and Keim and Stambaugh (1986) that analyze the United States stock market to show that the default spread is able to partly explain future excess equity market returns. The key novelty of this research is that it is primarily focused on the European markets. In this work I present the evidence that there exists a market-based default spread measure in the Eurozone that performs no worse than the US measure. The study of the UK and German markets discovers an unexpected relationship between the default spread and equity market returns that lays the groundwork for further research in the field.

Dmitry Bazarov
Thesis Advisor: Oleg Shibanov
How Counterparty Risks Affect ETF Performance?
Exchange-traded funds (ETF) often don’t exactly match their benchmark returns due number of reasons. Focus of this study is to look at what framework typical passive investor should use in order to identify the most efficient ETF. 
These research analyses asset classes focus of ETF, ETF liquidity, expenses and total net assets size and how these factors affect tracking differences. Apart from that I look at persistency of tracking difference over time.
Result show that ETF deviations are persistent. Deviations are higher when funds have higher expense ratio, low size of total net assets and are focused on non-U.S stock markets.

Alexander Belyakov 
Thesis Advisor: Sergey Stepanov
Corporate Governance during the Global Crisis of 2008-2010
In this paper, I use scores for five corporate governance indicators – audit conflict of interests, board effectiveness, board independence, board committees, and entrenchment provisions – from the Annual Sustainability Assessment by RobecoSAM to study how pre-crisis quality of corporate governance affected share price performance of companies from around the world during the global financial crisis of 2008-2010, and whether companies changed their corporate governance in response to the crisis. I find that companies with more effective boards experienced smaller share price decline during the crisis, and I also find that board independence and entrenchment provisions had a complementary effect: companies with strong boards fell less if they had more antitakeover measures. In the second part of the work, I find that balance of powers between the CEO and the board in companies that fell deeper during the crisis shifted in favor of the board: boards became more independent, and the amount of antitakeover provisions declined.

Guli Kholmatova
Thesis Advisor: Olga Kuzmina
Leverage, Adjustment Costs of Debt and Probability of M&A
The purpose of this study is to explore the relationship between the target capital structure and acquisition choices. I observe whether the deviation from the optimal capital structure, target leverage, affects the probability of a target firm to be acquired. Despite vast amount of research conducted on target capital structure and mergers and acquisitions (M&A), the studies of the overlapping field between the two branches have been relatively few. This paper is the first to investigate how deviations from the target leverage affect the probability of a firm to be acquired. The results of the study imply that deviations from target capital structure do not influence the acquisition strategies of a selling firm. The database used in the research includes all companies from select number of industries covered by S&P Capital IQ platform in the period from 2005 – 2015. Overall, this paper makes a contribution to the research studying the connection between the capital structure and investment decisions.

Radmila Khusainova
Thesis Advisor: Anton Suvorov
May Equity-based Crowdfunding Substitute for Traditional Sources of Early-stage Financing?
The equity-based crowdfunding, or crowdinvesting, has recently been established and rapidly gained a place among the main sources of early-stage financing. The idea is that a large pool of investors gives money in exchange for shares. By the example of two leading UK platforms (CrowdCube and Seedrs), I study how equity crowdfunding works, why individuals invest and why entrepreneurs may prefer one model to another. The paper compares two equity crowdfunding mechanisms: a direct ownership of shares and a nominee structure. I propose a crowdinvesting model, showing that small projects tend to choose a nominee, whilst a direct ownership is better in case of large required capital. In addition to theory, I support results by examining empirical data of successful campaigns. Conclusions of the paper may have implications for potential owners of the platforms. This contribution may be also applicable to today’s fast-growing industry of equity crowdfunding.

Olga Kvan
Thesis Advisor: Patrick Kelly
Impact of Financial News on the Russian Stock Market
This paper studies the impact of financial news at the Russian stock market. High levels of insider trading lead to high noise levels, which make it questionable whether it is possible to find any effect. Using the stock market returns of companies listed on MOEX and data on their financial news, I find that the days with news events predict higher volume-induced momentum over subsequent 10 days. At the same time, correlation between turnover and absolute returns is higher before the day of the event than at day 0.

Antonina Lyakh
Thesis Advisor: Grigory Kosenok
Maximum Profit Continuous Reaction Functions Maintaining Tacit Collusion in Infinitely Repeated Games
This paper examines tacit collusion considering two firms which compete on a differentiated product market for an infinite number of periods. The general punishment strategy which is a function of firms’ prices in the previous period is analyzed. The subgame perfect strategy that gives to the firms a higher profit compared to the price-matching strategy is provided. 

Anna Markova
Thesis Advisor: Russell Pittman
Ownership Concentration and Corporate Performance
In this paper I examine the relationship between ownership structure, specifically ownership concentration and the type of the largest shareholder, and corporate performance. I use panel data for Finland and Sweden from the Thomson ONE database for the period 2006-2011. I split the period into stable time (2006-7, 2010- 11) and crisis time (2008-9) to capture the difference in the economic landscape. Employing a two step system generalized method of moments I found that concentration is negatively related to corporate performance and family shareholders are positively related to performance in both periods. Foreign corporation shareholders are strongly positively related to Tobin’s Q during stable time, but negatively during the crisis. These results show that the effect of ownership structure on performance depends on the economic environment.

Tatyana Petrova
Thesis Advisor: Andrei Savochkin
The Effect of an External Enemy on the Within-group Cooperative Behavior
In this paper we investigate the relationship of an external enemy and evolutionary stability of generous strategy within the group. We construct a model of the repetitive with probability p game of two agents "prisoner's dilemma". The model is based on the principles of evolutionary game theory, and we assume that all players are programmed to play certain strategies. In each period an agent chooses one of three strategies: generous, neutral or greedy. The strategy depends on the reputation of an opponent. We consider the interaction of the agents in the two cases: in the absence of an external enemy, and with the external enemy group. As a result, we have found that, depending on the parameters, the altruistic strategy is evolutionary stable strategy in the absence of the external enemy. But when the external enemy group appears, the altruistic strategy is not evolutionary stable anymore.

Arseniy Samsonov
Thesis Advisor: Konstantin Sonin
Why do Dictators Prosecute Minorities?
Under autocracy people are often prosecuted because of their ethnicity, religion or sexual orientation. In this paper I present two models that explain this phenomenon. My first approach is close to that of “Economic origins of dictatorship and democracy” by Daron Acemoglu and James Robinson. Specifically, I analyze a society that consists of three types of voters and has to choose two policies, one of which is the tax rate and the other is minority rights. In the case of democracy policies are chosen sequentially by a parliament, while in a dictatorship they are selected by a ruler who maximizes the utility of one of the voter types. In both cases a revolution threat exists. I show under which conditions the dictator chooses lower minority rights than a democratic parliament. The other approach is to model the division of resources in a society using cooperative game theory. I represent democracy as a game where the division of resources is decided by majority vote, while in a dictatorship it is determined by mutual threats of repression and civil war. Using the Shapley value as a solution concept, I show that democracy always yields a higher payoff for the smallest group in the society than a dictatorship.

Dmitry Sorokin 
Thesis Advisor: Ruben Enikolopov
Political Budget Cycles in Russia: a Microdata Approach
This paper studies cycles in total procurement expenditures, average prices of contracts and number of contracts placed in different regions of Russia in the face of noncompetitive governor and parliament election using a detailed dataset on all procurement contracts placed in Russia in the period from January 1, 2011 to January 31, 2015. In countries with high level of corruption it is insufficient to look at total expenditures in search of cycles as politicians have incentives to enforce lower corruption in procurements before election, which leads to lower prices and ambiguous behavior of total expenditures. I find that average price, number of contracts, amount of suspicious procurements and their prices tend to increase before governor elections. Surprisingly, the number of contracts doesn't change a lot in front of parliament election while prices exhibit strong declines. I also test whether a change of governor leads to cycles in expenditures but find little evidence of such cycles.

Alisa Tizik 
Thesis Advisor: Ksenia Panidi
The Impact of Social Media on Physical Activity 
Abstract In this paper I study the effect of social media on humans’ physical activity. Published studies in Behavioral Economics show that observing the behavior of peers makes individuals more likely to resist the temptation to give up early. As social media enables observing peers’ behavior, we may expect the same influence from it. There is wide medical and psychological evidence that social media may positively influence physical activity by acting as a commitment device, as a plan of actions and as a peers’ network. However, little is known about this influence. This paper is aimed to shed some light on these questions. By applying various econometrics technics (OLS, IV, Probit and Ordered Probit, Heckit, Multinomial Logit) to the analysis of the survey data I come to the conclusion that there is a positive link between social media usage and sports activity. Moreover, males and those who state that self-control is unimportant in their lives, experience a greater effect of social media on their sports activities. In addition, I find that social media may help to be consistent with socially respected activities (reading books and doing sports), while helping to get away from not socially respected activities (watching TV). These findings suggest that social media can play at least three roles in increasing the time spent on sports: informational, motivational and a role of commitment device.

Ekaterina Zaytseva 
Thesis Advisor: Sergei Izmalkov
Factors Determining Domestic Box Office in Russian Motion Picture Industry
I examined performance of movies produced and released in Russia in years 2011-2014 in order to understand which factors affect weekly box office dynamics in Russian motion picture industry. Logarithm of first week box office and decay rate were used to described weekly box office dynamics. Regression results demonstrated that movie budget, familiarity with the story, presence of stars, New Year week and pre New Year week releases, and distribution by any of the top distributors have positive effect on the box office. It was established that high quality of the movie slows down the rate at which the weekly box office declines while distribution by any of the top distributors and the release a week before New Year speed it up. I have used two measures of competition – concentration ratio and number of long anticipated foreign movies released. While concentration ratio managed to demonstrate negative relation between level of competition and first week box office, competition from foreign movies failed to do so due to highly strategic behaviour of Russian distributors.

Artem Akselrod

Natalya Volchkova

The Impact of Exchange Rate Change on Exporters Behavior


This paper examines firm export behavior under exchange rate changes depending on import share in its total costs. Export and import real effective exchange rates for more than 80 industries are created on the basis of Russian State Customs Declarations for  2008-2011. Using estimator which allows to control for fixed effects and error clustering the paper finds that firms with high import shares in total firm costs weaker adjust volume of export in total firm revenues in response to exchange rate change. Firm productivity is found to have positive influence on firm export share. Robustness checks with different approaches to estimation confirm results of the main estimation.



Anastasia Andreeva

Oleg Shibanov

Construction of the Optimal Portfolio from Russian Assets

This paper presents the first comprehensive empirical study on the optimal investment portfolio construction in the Russian market. I construct ten optimal portfolios for the period 2007-2016 from stocks, bonds and Exchange Traded Funds traded on the Moscow Exchange. I consider the liquid, inexpensive, alive, long-existing assets with no zero historical quotes. Only the assets available to ordinary Russian investors with the wealth of at least 100 000 rubles are included in the analysis. The research is based on the Modern Portfolio Theory, and the Sharpe ratio is the base performance measure. This core model has several extensions to validate the results. The most important extension consists in the introduction of the realized returns. The ex ante optimal portfolios constructed in this paper outperform the MICEX index even after the transaction costs are added. The ex post portfolios outperform the market mostly when the latter rises. Both ex post and ex ante portfolios generally outperform the naive strategy and confirm the improvement of the performance when the ETFs are added.


Имя и Фамилия: Pavel Bacherikov

Руководитель: Oleg Shibanov

Название: Does It Pay to Pay Your Fund Manager? New Evidence on Side-by-side Management and U.S. Alternative Mutual Funds.

Абстракт: The paper investigates the impact of simultaneous management of hedge funds and U.S. alternative mutual funds (a practice known as side-by-side management) on the risk-adjusted performance of the latter. Using a unique dataset, resulted from merging Lipper and Morningstar’s hedge fund databases with CRSP and Morningstar’s on-shore mutual fund databases, and subsequent matching with corresponding mandatory SEC filings, I find that mutual funds, managed side-by-side with hedge funds by individual fund managers, significantly outperform their unaffiliated peers by 1.6 to 2.76 pp. annually. Moreover, the positive effect persists even after the abolishment of side-by-side affiliation, suggesting that the detrimental impact of managers' favoritism is of no concern for mutual fund investors. Besides, there is also evidence that mutual funds with higher inflows are more likely to continue being side-by-side affiliated, whereas those operating within larger families (in terms of total net assets) are less likely to continue as side-by-side managed.



Name: Anastasiia Bochkovskaia

Thesis Advisor: Shlomo Weber

Topic: The Impact of Languages’ Grammatical Structure on Regional Economic Development


Abstract: There are more than 7,000 living languages in the world. Starting from Edward Sapir and Benjamin Lee Whorf, scholars were determined to explore the ways in which numerous differences in languages influence thinking and habits of their speakers. Vocabulary, speech rate, the direction in which the language is written were listed as potential sources of behavioral distinctions among nations. In addition to these dissimilarities, languages vary grammatically in terms of the word order they employ. In this paper, I explore the link between this language feature and regional economic development. I argue that different behavioral patterns emerge, leading nations to different economic outcomes, depending on whether a language has a preferred word order, and which of the three components – subject (S), object (O), or verb (V) – it puts in the first place in a sentence. I find that countries which speak languages with no dominant order exhibit higher levels of GDP per capita, although for official languages, SVO or SOV order is more preferable. This result is consistent with recent psycholinguistic findings. Finally, I conduct a robustness check using another proxy for the economic development – nighttime lights visible from space obtained from the Defense Meteorological Satellite Program’s Operational Linescan System (DMSP-OLS). However, after controlling for the historical relatedness of languages, results become statistically insignificant.




Ksenia Cherepnina

Руководител: Ksenia Panidi

Название: If I Were You: Self-Other Differences in Risk Taking


Абстракт: People who aren’t directly affected by the outcome of their actions take many social and economic decisions.  Such decisions do usually involve some level of risk and uncertainty that hinders decision-making. The milestone here is that subjects’ decisions on behalf of stakeholders do not necessarily match the ones taken for self. The experimental estimation of reasons behind self-other discrepancies in risk taking is the core issue of this paper. Here I show that on average risk-averse people take higher risks when managing someone else’s money, while risk-seeking subject’s behavior remains unclear. Risk attitudes differences between beneficiary conditions could be explained by loss and inequity aversion. Decreased loss aversion partially accounts for rise in risk-taking in loss domain. Moreover, the majority of participants are also motivated by fairness considerations. Sensitivity to differences in wealth compensate the effect self-other bias has on risk aversion – inequity aversion makes people less risk seeking when managing someone else’s money.  Overall, results demonstrate that beneficiary has strong effect on risk attitudes. Moreover, loss and inequity aversion influence the differences in risky behavior on behalf of other. I anticipate this study as a starting point for further research on self-other bias.


Имя: Nadezda Kotova

Руководитель: Andrei Savochkin

Название: Preferences for Fair Wage Distribution

Abstract: What is the effect of workers' beliefs about fairness on the contracts structure and internal organization of the firm? This study considers agents who perceive the difference in outcomes to be unfair if it comes from pure luck and not their effort. I propose a way to incorporate such agents' concerns into a microeconomics model of the principal-agent type. I consider a setup with one principal and two agents, who are allowed to be heterogeneous in their tolerance towards unfairness. Then I derive the optimal contract and optimal allocation of tasks, which are different in their noisiness. The results show that the principal's surplus is higher when the more tolerant agent works on the task with less noise in the output. I also find that if the difference in the agents' tolerance is large, the more tolerant agent receives higher wage and prefers to work in pairs versus working alone.



Evgeniya Kudinova

Sergey Stepanov

Directors' Reputation Concerns and Decision-Making in Corporations  

Abstract

This paper studies the effects of the board of directors’ reputation concerns on corporate decision-making. I show that in the absence of any conflict of interest between the manager and shareholders, board’s reputation concerns may harm the firm value through the board’s reluctance to reverse bad projects. However, if the manager’s interests are significantly misaligned with the shareholders’ ones, the reputation concerns may have both positive and negative effects. The negative effect arises from the manager exploiting the board’s unwillingness to reverse bad projects. The positive effect is that the board’s reputation concerns may discipline the manager through demanding a credible proof of the project’s quality from him. I show that the negative effect is more likely to prevail when the board’s reputation concerns are high and the manager’s misalignment is particularly strong. In such a case, the board’s commitment to not interfere in the initial decision-making, while keeping the right to reverse projects at a later stage, increases the firm value by eliminating the impact of reputation.



Name: Ivan Mozharov

Supervisor: Sergey Stepanov, PhD

Title: Venture Capitalist Reputation and Portfolio Company Operating Performance

Abstract:

This paper studies the relationship between Venture Capitalists (VCs) reputation measures and a portfolio company’s operating performance. Extending previous studies focused on Return on Assets (ROA) as an operating performance measure, I study ROA drivers: profitability and revenue generation. Using three measures of reputation, I found that reputable VCs are positively associated with a portfolio company’s profitability and revenue generation in the pre- and post-IPO periods. Importantly, I demonstrate that reputable VCs bring value to their portfolio companies by relatively more relying on profitability over revenue generation than less reputable VCs in the pre-IPO period. Positive association of VC reputation with operating performance measures and reliance on profitability over revenue generation stays significant after controlling for VCs’ industry selection skills and self-selection bias, which appeared to be non-significant in my sample. My findings shed more light on a multidimensional impact of value-added activities across reputable and non-reputable VCs and help entrepreneurs better understand value propositions of each VC in a syndicate.



1) Roman Reshetnev

2) Oleg Shibanov

3) "Interaction between US and BRICS' Stock Markets: Does the Collapse of Stock Indices in 2015 Cause the Change of Mutual Influence?"

4)This paper explores the interaction between the US, Chinese and other BRICS’ stock markets during the last two decades and the last two years in particular. A majority of previous studies did not identify any substantial increase of the influence of emerging stock markets on US’s ones. However, the collapse of stock indices in 2015 and overall negative effects of growth deterioration in China made me think about possible turnaround point in such a relationship. I conduct the research applying such methods as Granger-causality test, Quandt-Andrews breakpoint test and regression analysis. According to my results, refocusing influence is not observed between the US and China: trading results in China do not significantly affect returns of the US’s indices. The results for other BRICS countries generally turned out to be hard to interpret. Concluding the paper, I point out that the influence of China on developed markets could still grow decently in the near future, backed by its increasing integration into the global financial markets.


Vakatova Irina

Alexey Zakharov

To Shoot or Not to Shoot? Modeling Incentives of Agents in Gun-Free Zones


Abstract

This is a work on the topic of gun-free zones and their influence on social welfare and public safety, particularly concerned about the US situation. The game-theoretical approach is taken to model the interaction between the law-abiding citizen inside the institution (referred as Student) and potential shooters (referred as Criminal) under both shall-carry laws and gun-free zone implementation on campus, with Social Planner to decide on which option to choose between these two based on social welfare. The results showed the probability of attack on Students to increase with the shift from shall-carry laws to gun-free zone. Almost under no circumstances is that beneficial for Planner to implement the gun-free zone, particularly, in mixed-strategy equilibrium, the one most resembling the real-world situation, it's strictly beneficial for society to guarantee licensed individuals the right to carry weapons for self-protection. Policies affecting the Criminal’s costs in case of an armed attack are found the best to be chosen to both decrease the probability of attack and increase social welfare, while the ones targeting availability of firearms in general seem to produce the opposite effect.


Timofey Volozh

Ksenia Panidi

Goals as Reference Points: a Behavioural Model of Crowdfunding

It is well-known that humans and animals experience an increase of motivation while approaching their goal (Kuppuswamy, Barry, 2015). The funding dynamics of reward-based crowdfunding projects is a convincing evidence for this phenomenon. Thus, according to Kickstarter official statistics, backers (i.e. investors) tend to support a project a lot at its launch and right before its finish, whereas in the middle of a project there is a significant decrease of the number of pledges. In this paper I try to explain this U-shape pattern through presenting a behavioral model of crowdfunding with backers perceiving monetary project goal as a reference point and experiencing emotional loss in case the goal is not reached.