Paper long abstract:

This paper analyses the economic impact of trade costs on agrifood exports from the Central Asian countries between 2005 and 2017. The study employs a structural gravity model incorporating the World Bank's Doing Business indicators for cost to export and time to export to test four hypotheses: (1) remoteness inhibits Central Asian countries' engagement in global trade, (2) cost to export impacts on Central Asian countries more than on the rest of the world, (3) the impact of time to export is higher on perishable as opposed to non-perishable goods, and (4) changing definitions and measurement of Doing Business trade costs variables produce different results regarding the impact on export volumes. Initial econometric results for the decade 2005 - 2014 gave strong support to the first hypothesis, but conflicting evidence on the second and third hypotheses. Unexpected results included positive coefficients, in some cases statistically significant, for the relationship between trade costs and exports from Central Asia. Noting that the Doing Business methodology was revised in 2016, the models were repeated using data from 2015 to 2017. For perishable goods (tomatoes and grapes) the coefficients on trade costs were negative, statistically significant and with a larger impact in Central Asia than the rest of the world. For non-perishable goods (wheat and cotton) the results were not statistically significant. In sum, more recent Doing Business trade cost measurements support better our three hypotheses. The results cast doubt on the suitability of using the pre-2016 Doing Business methodology on trade costs in the Central Asian context.

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Paper long abstract:

The effect of technological innovations on labor market outcomes has been widely studied. According to a recent World Bank report, 1.8 billion jobs in developing countries are at risk of being automated. However, little is known about how technological innovations will impact Central Asia. I hypothesize that, in the Central Asian economies of Kazakhstan, Kyrgyzstan, Tajikistan, and Uzbekistan, a firm's level of computerization is negatively correlated with its workforce size. Given a high proportion of Central Asian workers fill manual, low-skilled positions, a substantial number of these positions should, in theory, be susceptible to technology-induced labor substitution. To test my hypothesis, I use the World Bank's Business Environment and Enterprise Performance Survey (BEEPS) to assess the relationship between technological advancement, as measured by changes in a firm's personal computer (PC) adoption, and changes in its workforce size. My analysis finds no relationship between a firm's computer use and its workforce size. This finding withstands a battery of robustness checks. The World Bank asserts that the rapid growth and diffusion of digital technologies, along with the growing importance of the digital economy, necessitate a discussion among policymakers and policy researchers about the consequences of these new technologies. A better regional understanding of the impact of technology on labor could help to guide assessments of policy options to maximize the benefits, and minimize the adverse impacts, of new technologies.

Paper long abstract:

The problem of social capital leads to better understanding of trends and what has been going on in post-Soviet Kazakhstan. This paper focuses on social capital in small and medium business sector in Kazakhstan and its connection with government regulation. It is tested the hypothesis that low level of social capital in the SME sector leads to increase of demand for state regulation, despite the low efficiency of state representatives. Level of trust and self-organization are considered the main components of social capital. The main method used by the author is a survey of small and medium businesses in Kostanai region, Karaganda region and Shymkent region, as well as in the cities of Astana and Almaty. The collected data allow me to argue that the low capacity for self-organization and level of trust among entrepreneurs lead to greater demand for government regulation, although it is not effective.

The main regressions:

Demand for formal institutions = - 0,151* Eval_General + 0,225*Gender +0,08*Age - 0, 081*Education -0,486*North - 0,561*Astana - 0,368*West + ε

The main conclusions:

• General assessment of government is negatively associated with the demand for formal institutions (satiation effect)

• Higher level of education of respondents decreases the demand for formal institutions

• Respondents from the North, West regions and Astana demonstrate lower demand for public institutions than in the South

Demand for government interventions in the market = 0,425 + 0,086* Eval_General + 0,218*EVAL_EXPER + 0,132*TRUST_INSTIT - 0, 096*Education + 0,466*North + 0,003*Workers + ε

Main conclusions:

• General assessment of government is positively associated with the demand for government intervention to the market (more trusted government)

• The same is true about personal experience of dealing with government

• Trust in formal institutions increases demand for government intervention (similarly to the welfare states of Northern Europe)

• Northern respondents demonstrate higher demand for government intervention to the market.

• More educated respondents want less government intervention in the market

Paper long abstract:

In recent years, Tajik businesses, as well as domestic researchers and international institutions, public organizations and government bodies have all become increasingly interested in improving corporate governance.

This is due, in part, to the fact that further development of the corporate sector in Tajikistan, where a process of reorganizing the main industries is still ongoing, depends upon the attraction of significant investment, both external and internal.

Recent research shows that the overwhelming majority of investors consider the company's management practice bodies as a more crucial factor even than the financial indicators of their activities.

Consequently, this paper focuses on the specifics of the formation and development of corporate governance in the non-financial sector of the Tajik economy since independence. We argue that in the process of shaping corporate governance, two interdependent components can be seen: first, bringing the legislative foundations of corporate governance in line with international requirements, and secondly, transferring manufacturing enterprises, mainly established during the Soviet Union, into closed and open joint stock companies. This process is accompanied by the introduction of corporate relations to these enterprises.

Our sociological surveys conducted among domestic corporations (joint-stock companies) show that due to insufficient qualification of the management of companies for the further development of corporate relations at enterprises, companies remain insufficiently competitive even on the domestic market.

A failure to adapt to the requirements of corporate governance, particularly on the part of management and board of directors of companies, leads to non-compliance with elementary procedures:

- decisions on strategic issues are made by the board of directors or management of the organization, despite requirements that they be adopted at the general meeting of shareholders;

- minority shareholders are often not involved at all, or are notified too late about the annual report, or shareholder election meetings;

- the proportion of independent directors remains low, well below trends in corporate governance practice in the US, Europe or Japan;

It would seem that the prerequisites for improving the efficiency of domestic corporations include increasing the proportion of independent directors on the board, involving external auditors in general shareholders' meetings, and increasing the role of minority shareholders in the decision-making process. All these measures will lead to an increase in the attractiveness of domestic companies for foreign investors.