Hanna Abilava:
“Explaining Foreign Direct Investment in Transition”

This paper, using a dataset containing information on OECD countries’ FDI into transition economies, examines the nature and determinants of FDI as well as the possibility and instruments for two transition countries to compete for FDI from the same source. Estimation results based on the gravity approach revealed the vertical nature of FDI and show that along with traditional determinants such as markets’ demand, interest rates, relative capital to labor ratio, and labor costs, exchange rate related factors are also significant and plausible. Countries with stable and floating exchange rate attract more FDI. Theoretical results also suggest that transition country’s currency appreciation more than that of its rival can divert FDI inflows towards the competitor. Countries can also compete for FDI by having relatively higher economic growth rate, relatively lower interest rates and relatively lower unit labor costs. However, it appeared to be that the growth rate of relative unit labor costs affects FDI positively.

Olena Alyeksandrova: “Importance of Country Versus Industry Effects for Diversification Strategies”

This paper examines the importance of country and industry effects for diversification strategies. It researches the volatility of pure country and industry returns, because the higher volatility provides the source for shocks elimination and for explaining correlation structure of country and industry indices. The paper finds out that country factors are more volatile, and that country composition is the main source of low correlation between countries. Industry composition of country indices is less important in correlation structure. So, country diversification is better than industry one for the considered emerging market region

Anna Belanciuc:
“Estimation of Individual Demand for Alcohol: Evidence from Ukraine”

The paper focuses on the empirical estimation of the demand for alcohol from individual standpoint using the recent data of the Ukrainian Longitudinal Monitoring Survey (ULMS). More specifically, the paper examines the nature of the demand curve slope, structure of alcohol consumption by types of drinks, as well as evaluates the normality assumption of alcohol and drinking pattern in Ukraine. The analysis is performed in the context of rational addiction model developed by Becker and Murphy (1988). A Heckman two-stage procedure along with static and dynamic Tobit models on panel data were used to estimate the model. The obtained results are generally consistent both with economic intuition and findings of other papers on alcohol. Estimation results support our expectations on the classical decreasing demand curve. In addition, individual income and price on ethanol are found to be significant determinants of risk to be a drinker. Notably, this risk is more sensitive to price than to income. We received an empirical evidence that alcohol is a normal good as many other consumer goods. In addition, the paper can be considered as an argument in favor of the rational addiction model suggesting that Ukrainian consumers behave rationally in choosing addictive consumption.

Olga Bilonizhko: “Measurement and Determinants of the Hidden Economy in Regions of Ukraine and Russia: Mimic Approach”

The author applies MIMIC (“Multiple Indicators – Multiple Causes”) model to measuring the hidden economy as percentage of gross regional product (GRP) in regions of Ukraine and Russia and determining the main causes of the hidden activity in 2001-2003. Among chosen causes of the hidden economy, namely, tax pressure, specialization of the region (industrial or agricultural), unemployment, criminality, number of small enterprises, immigration the first three appeared to be significant in most specifications of the model. Real GRP per capita and employment rate are used in the model as indicators of the hidden economy. The author finds that tax pressure has a significant positive effect on the hidden economy. Agricultural and industrial specializations both have significant positive impacts on the hidden sector almost equal in size. Unemployment has a significant negative effect on the hidden economy, which may be explained by the fact that today’s hidden economy is mostly maid up of the officially employed economic agents, who use different schemes to avoid taxation. The author concludes that given the set of causes and indicators outlined, the MIMIC model predicts less deviations of the hidden economy across regions as compared to the results obtained in other studies on the field, which were using the electricity consumption method to measure regional hidden economy size. Based on finding no substantial deviation of the hidden economy size across regions, the author comes to the conclusion that policy targeted at reducing the hidden economy size may suffice at the country’s level without going deeply into region’s specifics.

Inna Bisovetska:
“Wage Differential Between Metropolitan and Nonmetropolitan Areas: Case of Ukraine”

The paper explores an urban wage premium and factors that cause it. In our research we tested three theories that should determine the size of urban wage premium and factors that cause it: omitted ability variable; higher productivity of urban worker and higher cost of living in big cities. On the basis of the data from Ukrainian Longitudinal Monitoring Survey 2003 we performed OLS estimation for ordinary wage regression, instrumental variable technique, and fixed effect regression. We found that the argument in favor of positive urban wage differential is controversial and urban wage premium cannot be fully explained by any of the hypothesis. There is evidence that returns on some human capital characteristics are higher in urban settlements; omitted ability revealed to be not important in determination of wage differentials; and migration in both directions: from rural to urban settlements and vice versa, does not influence on the salary within this sample.

Natalya Corotas: “Influence of Economic and Political Factors on the Level of Government Debt: Case of Transition Countries”

The paper investigates the size of impact of political and economic factors on the level of government debt in transition countries using panel data on 14 emerging economies for 11 time-periods. The analysis is performed following Hendry’s approach (“general to specific”) to finding the right specification of the model. Different econometric methodologies such as fixed/random effects, FGLS, pooled OLS were employed in order to find out and test the most applicable model. Obtained results of the study are consistent with mainstream economic theory and economic intuition. The model clarifies that effect of such economic variables as GDP per capita, growth rate of output, change in output gap, inflation, unemployment and real interest rate was found to be significant in explaining the level of government debt. Furthermore, one of the main conclusions of the paper is that political factors, such as EU membership, years of elections and extent to which a given politician is constrained in his/her choice of future policies, give the reasonable explanation of their influence on the level of government debt.

Cristina Craciun:
“Migration and Remittances in The Republic of Moldova: Empirical Evidence at Micro Level”

The main question that is under investigation in the paper is how and to what extent the fundamental characteristics of households and migrated individuals influence the amount of remittances in the Republic of Moldova. For better understanding of remittance flows, they were studied from both sides. Namely, the study analyses the size and the likelihood to remit from the migrant’s part, and the likelihood to send money or goods from the family member’s part. Another interesting aspect that is analyzed in the paper is the impact of migrant’s and household’s characteristics on the method chosen to transfer money, and on the frequency of remitting. For testing the hypothesis under which migrant’s and household’s characteristics affect the remittances flows two approaches were used: Tobit and Cragg’s two-part model. The obtained results appeared to be consistent with the literature studied, and led to the conclusion that migrant’s gender, age, working experience and destination country, as well as household’s income - all have an impact on the likelihood and the size of remittances.

Kateryna Demjanchuk: “Intellectual Property Rights Protection and Economic Growth”

The primary goal of the research was to investigate the impact of intellectual property rights protection on economic growth, including transition countries in the analysis. The dataset for 91 countries that covers the period of 2000- 2004 was created for the study. On the basis of the new growth theory and using fixed effect panel data analysis it was found that in general intellectual property rights protection has positive influence on GDP growth in lowincome countries and countries with low level of intellectual property rights protection. However, the significance of the coefficients turned out to be ambiguous. Inclusion of transition countries in the analysis influenced significance of estimated coefficients. Also, marginal effect of intellectual property rights protection on GDP growth for low-income and transition countries were estimated as positive and significant

Alena Dubouskaya: “Relative Performance of DEA and SFA in Response to Multicollinearity and Measurement Error Problems”

This study examines the relative performance of DEA VRS and SFA ML models in response to multicollinearity and measurement error in endogenous variables problem. We found no significant influence of multicorrelation even for realistically high correlation levels (с=0.8) in the case of two inputs. Moreover, no clear direction of change of performance was observed with the introduction of the measurement error into endogenous variables, when the measurement error is moderate (not more than 20% of input).

Dmytro Galytskyy:
“Does the Rule of “Sovereign Ceiling” Hold for the CIS Countries?”

This study investigates the appropriateness of the rule of “sovereign ceiling” in the case of CIS countries. According to this rule, no company is more creditworthy than its government. For the countries in sample (Ukraine, Russia, and Kazakhstan) we use the data on spreads on corporate and government bonds to analyze the risk transfer from a government debt security to a corporate one. We find that the rule is not always believed by market participants, since often the risk transfer is less than 100%. Later we pool the data to estimate the industry and country-average coefficients. Again we find that investor’s perception of risk does not always coincide with the full (100%) risk transfer and the justification of the rule of “sovereign ceiling” that whenever the government defaults, the firm defaults too, should be questioned.

Andrey Gamolya:
“Stock Market and Economic Growth in Ukraine”

This paper investigates Ukrainian reality, searching for facts of statistical dependence between financial and real sector performance. Financial sector is deemed as an indispensable part of any national economy. Allegedly, it is somehow connected to real sector productivity and this relationship is supposedly two-sided. The million dollar question here would be – exactly how they affect one another? By scrutinizing this ambiguous relationship we try to identify the role of financial intermediaries in this complex system. Structural Vector Autoregression model is being employed as an instrument of assessing alleged ties, while Stock Market is singled out in order to ascertain ponderable role attributed to it ad hoc.

Olexandr Gordy: “Modeling the Retirement Decision in Ukraine”

This paper investigates the factors influencing retirement decisions in Ukraine. The research is based on data from Ukrainian Longitudinal Monitoring Survey (ULMS) for 2003 and 2004. The sample includes individuals, who made their retirement decisions between 2003 and 2004. The paper is based on an empirical model that allows investigating the influence of wage, retirement benefits, job satisfaction, working tenure, health status, and socio-demographic factors on retirement decision. The estimation is based on binomial logit model. The results of the research conducted generally go in line with the relevant literature. However, there are some differences in the results coming from peculiarities of economical and social conditions in Ukraine as a transition economy. One of the main findings of the paper is that wage and job satisfaction have a negative influence on the probability of retirement. Another finding is that health status, level of education and marital status does not influence a retirement decision of Ukrainian elder workers.

Daryna Grechyna:
“Contracting in Agriculture: Empirical Evidence from Barley Production in Ukraine”

This paper investigates the issue of economic interaction between the participants of the contract. A typical principal-agent problem, reflected in controversial goals on the way of fulfillment of the common task, is considered on the example of malt-producing company and farms-suppliers of barley. The aim is to find crucial determinants of the quality of agents’ performance, measured as a yield of barley, and to test

Sofiya Huzenko: “Examination of the Border Effect in Ukraine: How Far Is the East from the West?”

The study of price dispersion over 25 main administrative units of Ukraine (24 oblasts and Autonomous Republic of Crimea) over the period of 1997-2004 provides evidence on the border effect in Ukraine, however, somewhat contradictory. Border effect appears to be significant if to rely on one measures of price volatility but not significant according to the other, so the results are not robust. Its distance equivalent is about 560 kilometers, which is negligibly low figure in comparison with findings of the researchers for other countries. Ukrainian markets appear to be more segmented by product and oblast than by a hypothetical East-West border. In line with common trade theory, distance, which approximates well transportation costs, is also proven to have a positive impact on the price dispersion. Besides, differences in linguistic preferences and gross added value per capita appear to matter in Ukraine.

Nadiya Klos: “Incentive Performance Related Pay and Productivity”

This paper is an attempt to study influence of the use of performance related incentive pay applications on company’s performance in terms of productivity. The subject of interest are: expected bonus share in full wage, introduction of monetary incentive performance related pay scheme, not operating any monetary incentive performance related pay scheme, profit sharing system and level of wage determination. An annual sample of ULFS enterprise level panel questionnaire for 6 time periods of 1993 - 2003 will be used. For estimation RE model was found to be the most appropriate.

Valentyna Klymenko (Bilyk): “Financial Innovations and the Demand for Money in Ukraine”

The thesis is devoted to investigation of the relationship between financial innovations and the money demand in Ukraine, over January 1997 - December 2005. In the study, financial innovations are presented by the index of financial innovations which represents the experts’ view on the past and current situation in the development of the certain financial products and instruments widely used in retail and wholesale banking activity (e.g., automated teller machines, collateralized mortgages, credit cards, debit cards, corporate bonds, automated clearing houses, electronic banking, forward contracts, treasury bills, and wire transfers). Vector error-correction model is applied in order to study the relationship between financial innovations, real volume of industrial production, nominal interest rate, expected depreciation of Ukrainian hryvnia, the level of dollarization in the economy, expected inflation, and real money balances in accordance with the theoretical concepts, as well as to investigate the response of money demand to financial innovations shock by means of the impulse response function. Robustness check indicates an existence and significance of the financial innovations’ impact on the demand for money in Ukraine. While financial innovations have positive relationship with the demand for real money balances in the long run in Ukraine, in the short run their impact is negative.

Tamara Konoreva: “Investigating the Role of Health: Is It Really an Intangible Resource for Economic Growth?”

In this study I investigate the empirical evidence of health factor influence on economic growth in different country groups. A particular attention is paid to the research of health peculiarities in the countries with transition economies. Based on the PCA method I construct four different health indices including eight health factors that could proxy for health. Extending production function model of economic growth by constructed health indices I examine the influence of health factor on the real output. The main finding is that under majority of specifications health indices were found to be positive and significant. The influence of health on productivity growth in transition countries does not differ much from the health influence on productivity in the other countries groups. Under stochastic frontier estimation approach, in terms of coefficients the health influence on output was also found to be positive and significant. The main findings provide the grounds to claim that health is an important factor for the output growth, and the governments should consider for the nexus between health and productivity when deciding for different policy implications.

Pavlo Kostromytskyi: “The Relationship between Capital Markets and Institutions: Cross-Country Analysis”

In this paper we study the efficiency of capital markets of Ukraine and five other post-communist countries, namely the Czech Republic, Hungary, Poland, Slovakia and Russia by applying weak- and semi-strong-form tests of efficiency. The results are analysed from the standpoint of institutions necessary for capital market development, both formal and informal, that were or were not created in these countries during transition. It is shown that the superiority of gradual over Big Bang approach is reflected in these countries capital markets efficiency. We conclude by outlining the actions that are necessary for the Ukrainian capital market to grow, develop and become more efficient.

Dmitriy Kostyuk:
“Dividend Payout. Its Impact on Firm Value”

This paper considers corporate finance as a major source for company’s welfare. We reckon dividend policy as a crucial factor in formation of corporate value. Different dividend payout strategies employed by various enterprises across three countries (Ukraine, Russia, Croatia) lead to various performances. Thus, we regard the effects spurred by paid dividend as a core of our study. Therefore, our aim is to identify the link connecting preferred strategy and final outcome in monetary terms. Our task is to point out the consequent benefits of prudent dividend policy. We model the profitability of the firm and endeavour to relate it to dividend policy, relying on ideas suggested by Fama and French (1995). We find a statistical evidence of positive dependence between portfolio return and income distributed among shareholders.

Roman Kravchuk: “On Endogenous Business Cycle under Consumption Growth Preferences”

The paper presents a computable general equilibrium model of deterministic endogenous business cycle with endogenous growth or steady state possibilities. The model is built on the consumption growth preferences (CGP) idea, the consequence of aspirations and achievements level theory from applied psychology. Under CGP, instantaneous utility is a function of both consumption and its growth rate. The resulting trade-off produces Pareto optimal cycles: high growth rate of consumption today implies high consumption level tomorrow; however, the resource constraint diminishes the capability to grow when consumption level is high. Under the long-run growth (either endogenous or transitory to the steady state), the tomorrow’s growth opportunities are better than today’s; thus, it is optimal to save today by reducing the consumption level. The empirical part of the paper tests the CGP assumption on the panel data from 51 countries.

Iryna Kravets:
“Value at Risk for Capital Reserve Requirement Regulation in Ukrainian Banks”

Value at Risk (VaR) has been widely promoted by the Bank for International Settlement as well as central banks of the developed countries as a way of monitoring and managing market risk and as a basis for setting regulatory minimum capital reserves. The thesis studies the market risk estimation methodology VaR and its implementation in the big size Ukrainian bank for determining the capital reserve requirement. Three VaR methods, namely Variance/Covariance method, Historical simulation and Monte Carlo simulation, are applied for the considered bank. The Variance/Covariance matrix of risk factors is estimated using GARCH models. The empirical results show that all three VaR methods are adequate to use in the bank, but Variance/Covariance method overestimates VaR, Historical simulation and Monte Carlo simulation underestimate VaR. Nevertheless, Historical simulation is chosen as the best method for the considered time period of data. The market risk is defined as 18169 UAH and market risk capital reserves are defined as 59594 UAH. The results of the thesis are implemented in the big size Ukrainian bank; therefore, VaRs are monitoring and capital reserves are defined daily there.

Yuriy Kurganov: “Describing Patterns of International Trade in Transition Economies: Gravity Model Extension”

This paper evaluates the change in patterns of international trade in transition countries attributed to countries’ participation in common economic clusters (poles of economic gravity) by utilizing gravity model specification. To achieve this goal we attempt to extend existing measures of economic distance on both theoretical grounds and for empirical estimation. In doing so, measure of regional institutional development is proposed as an important indicator for change in economic distance between transition countries entering common economic areas. Using the extensive set of econometric methods the developed measure is proved to be positive, highly statistically significant and quite robust for different types of models. Hence we showed that high level of regional governance decreases economic distance between countries and thus increases trade between them and vice versa. We also provided quantitative estimates of this effect, which should be useful for county policy-makers. For example we found that in case of Ukraine’s membership in the EU common trade area its trade with EU countries would increase by about 21%, while it will loose only about 0,43% in trade with countries like Russia, Belarus, Moldova, which in turn provides for straightforward policy implication. We also incorporate in this study recently developed econometric modeling technique (3-stage GMM) to allow for spatially correlated error terms, which though, turned out to be not present for the considered set of countries.

Oleksandr Lytvyn: “The Impact of Monetary Union Membership on Government Financial Stability”

This study investigates the impact of entrance to monetary union on the government financial stability of the union members. In order to do the analysis the general equilibrium model was constructed. It describes relations between utility maximizing, governments, central bank and private agents of the union. Comparison of model solutions for financial stability in autarky case and union membership reveals deterioration of financial stability after the union entrance. While simulating dynamic solutions it was found that in case without size disparity between union members, countries demonstrate healthy financial state with budget surplus, but with arising size disparity financial stability of large countries deteriorates, whereas small countries have improvement. Obtained conclusions were tested using the dataset for European Monetary Union countries. Estimates of empirical model show that there is no evidence of entrance effect on large countries’ stability, whereas for small countries theoretical conclusion about increase in stability is not confirmed. Moreover, from empirical analysis it was found that relation between country size and financial stability is rather strong, indicating that large countries tend to be more stable, which is opposite to results of theoretical model.

Kateryna Malyuhina: “Inbound Tourism In Ukraine”

This paper studies determinants of inbound tourism demand in Ukraine in a theoretical framework of the gravity model. The sample under study contains unbalanced panel data for 75 sending countries during the period 1999-2003. Ordinary least squares (OLS) with panel-corrected standard errors (PCSE) estimation technique is used. The results suggest that the number of foreign tourists' arrivals at national borders of Ukraine depends positively on wealth of tourists (measured by GPD per capita in a sending country) and total number of tourists' departures; number of tourists' arrivals depends negatively on distance to Ukraine and visa requirements for residents of a country. The paper shows that there are region-specific effects determining demand for Ukrainian tourism services: while CIS countries' citizens are more inclined to visit Ukraine than the others, EU15 inhabitants are reluctant to spend vocations in Ukraine compared to the others. The paper suggests abolishing visa requirements for world greatest traveling nations and discusses recent realization of this recommendation by Ukrainian government.

Oksana Nesterenko: “Competitiveness of Ukrainian Products”

This study examines the competitiveness of Ukrainian products on the world market, as measured by Balassa index of Revealed Comparative Advantage. I find that in 2004 beverages were the most competitive; while in the previous years iron and steel were heading the leading positions. The dynamics of competitiveness and trade patterns for the period 1992-2000 are analyzed by means of Galtonian regression and stochastic kernels. The results suggest that specialization of Ukrainian trade is widening. In attempt to determine the factors that influence competitiveness, I follow Neo-Shumpetarian approach, which predicts that competitiveness on the macro level is determined by the process of innovation and acquisition of new technology. Thus the hypothesis that the competitiveness of Ukrainian products is influenced by FDI and use of imported products in the production process is tested. The results are compared to the ones of Hungary. I find that in Ukraine FDI has influenced competitiveness negatively and very little, and the role of imported inputs in production is also negative. The results are completely opposite for Hungary.

Alena Piskurouskaya: “Why Do People Invest into Russian Mutual Funds?”

Ten years ago first mutual funds started their operations in Russia. The crisis of 1998 leads to postponing of industry development. However most of the mutual funds survive during crisis and since the beginning of the XXI century industry of Russian mutual funds has been characterised by high growth rate. The last three years bring unexpected fluctuations in the inflow of money into the mutual funds: slowing down in 2004, moderate growth in 2005, and January surprise in 2006 when inflow during one month forms the one third of the total inflow during previous year. The unexpected behaviour of fund flows raises the issue of the main factors which determine the decision of investors to put money into the mutual fund. This paper presents one of the attempts to investigate such factors.

Yuriy Podvysotskiy: “An Investigation on the Effect of Mobile Number Portability on Market Competition”

This thesis examines possible affects of implementation of technology known as mobile number portability (MNP) on market competition. Previously it was strongly believed that MNP leads to improvement of market competition, but recently several papers argued that. This work developed theoretical model aplicable for investigation of the effect of MNP under different market parameters such as growth rate and interconnection costs. Arellano-Bond GMM model was used to estimate empirically the effects described in theoreical literature on switching costs and also the ways that MNP changes these effects. Original cross-country firm-level panel data was used for the estimation. Empirical results provide theoretical evidence, besides, estimated model is transformed into a rule that could be applied for testing possible effect of MNP on market competition.

Bogdan Povoroznyk: “Infrastructural Poverty Conception and Welfare Estimation in Ukraine”

The intent of this paper is to estimate poverty in Ukraine by using conception of “infrastructural poverty” and alternative asset index method. Traditionally poverty and inequality analysis is based on income or consumption as preferred indicators of living standards. Such approach defines utility a little bit narrowly – as a function of money and has various data - related disadvantages. Researchers give relatively insufficient attention to the households’ ownership of durables (assets) or to the inequality in possessing those assets among households or individuals. This paper defines the socio economic status of households in terms of assets, thus moving the process of poverty measurement from monetary – based measure to asset – based. Asset index method based on Principal Component Analysis is used to estimate poverty. This method allows to estimate headcount poverty indices and degree of inequality in the form of Lorentz Curve and it’s numerical equivalent - Gini coefficient. Obtained results are consistent both with economic intuition and findings of previous studies. The main findings of the paper is that wealth is redistributed unequally: poor rural regions and relatively rich urban. Inequality will be reduced by addressing unequal distribution of income generating assets, there is a great necessity in the addressing assistance to the infrastructural development of rural regions.

Olena Pryhodko: “Relationship between Household Characteristics and Poverty in Ukraine”

This paper undertakes a multivariate analysis of the household-level determinants of poverty using the first large longitudinal micro data set for Ukraine – the Ukrainian Longitudinal Monitoring Survey (ULMS) for the year 2004. Important correlates of poverty are identified, and causality is attributed to them where possible with the use of the models that estimate welfare, poverty, and poverty gap based on an absolute and a relative poverty lines. Results of the study indicate that among significant household characteristics that make poor people poor are large numbers of household members and children in a household and employment of the household head at a private agricultural enterprise. Significance of high education attainment of the household head, his/her use of computer, and such attitudes as life and job satisfaction is shown. Minimum amount of transfers needed to eradicate extreme poverty by half in observance of the first Millennium Development Goal (MDG) amount to 37.8 UAH per poor person per month, which in total amounts to approximately 126 million UAH.

Oleksandr Shkurpat: “Regional Labor Productivity Disparities in Ukraine: Main Causes and Spatial Patterns”

This work covers the issues of interregional labor productivity disparities in Ukraine. It was motivated by the current statistics on regional labor productivity in the country. One of the main goals of the research is to disclose the causes of differences in aggregate productivity per worker using the shift-share approach. It was found that labor productivity disparities across Ukrainian regions are mostly attributable to the productivity differences across regions that in fact are uniform among types of economic activities within each region. To lesser extent labor productivity disparities can be ascribed to the regional specialization. Another important issue that was covered in this research is a detection of regional clustering within the Ukrainian borders with respect to labor productivity. According to the obtained results there is a strong evidence of the presence of two clusters: low productivity cluster including three western regions and high productivity cluster that consist of the three regions situated in the eastern part of Ukraine.

Dmytro Sioma:
“Rental Housing Price Differentials and the Cost of Commuting. Evidence from Kyiv”

This study provides estimation of the commuting cost on the basis of spatial rental housing price differentials throughout Kyiv. A framework for the analysis is developed within which the cost of commuting is approximated with the function of time of commuting travel and both the monocentric and the polycentric models are estimated, examined and interpreted. The results of this study show that the monocentric model is not appropriate for the analysis of the commuting cost because it gives downward biased estimates of the latter. The findings also comprise the fact that for the inhabitants of Kyiv commuting indeed matters and the possibility to commute less costs relatively much money, and, finally, that the “real” economic centre of Kyiv is not the “geographical” centre of the city at Majdan Nezalezhnosti as it was assumed before, but Pechersk.

Oleksandr Slobodyanyk: “Determinants of Access to Higher Education in Ukraine: The Case of National University of “Kyiv-Mohyla Academy”

This thesis paper defines and examines different socioeconomic, personal other factors which influence the applicant’s access to higher education establishments in Ukraine. From the data of the Entrance Examination Committee of the National University of “Kyiv-Mohyla Academy”, I have distinguished the list of determinants that have the most significant impact on the probability of the applicant to be enrolled into the university and win the state financed place. Also, the existence of the “Fan-spread” effect and the absence of the “Matthew” effect in Ukrainian educational market were proved. For empirical estimation, I have used the binomial logit regression model. The received results are mostly consistent with earlier findings, economic and sociologic intuition and logic.

Mikalai Trafimovich: “Term Structure of Interest Rates Anlysis. The Case of Belarus”

The term structure of interest rates is a very important question in analyzing both financial markets and the conditions of the economy as a whole. This thesis provides the analysis of the term structure of interest rates on Belarusian government bonds by testing two theories: Pure Expectations Hypothesis and Liquidity Premium Theory. For this purpose yields to maturity and forward interest rates for bonds with maturity up to one year are calculated. The period investigated is 1999-2003. Pure Expectations Hypothesis is tested using the expectations of yield spreads, Liquidity Premium Theory – using the differences between forward and spot interest rates. The results of the study indicate that on average a yield curve for Belarusian GKO has a downward sloping structure. Pure Expectations Theory proved to be inconsistent with the data. Investigating of the liquidity premia indicated the presence of time varying negative premium.

Iryna Tsahelnik: “Foreign Bank Entry in CIS Countries”

The intent of this paper is to find which factors were crucial for foreign banks when they decided to enter markets of Commonwealth of Independent States. It was shown that economic reforms, wealth of the country, political risks and financial sector size were the main determinants which attracted foreign banks. Moreover, it was found that economic reforms enhanced financial sector efficiency in post-soviet countries.

Inna Yuzefovych: “Ukrainian Industry in Transition: Steel Price Determination Model”

Ukrainian steel industry is by far the most important field for the country. The research investigates factors that influence Ukrainian steel prices. The model is done with simultaneous equation model techniques which required by endogenous nature of the supply and demand equations. The obtained results show that Ukrainian steel pricing is consistent with that of developed countries. Thus, Ukrainian steel industry has passed its transition position and act as a fullyfledged market economy sector. Thus, Ukraine’s joining WTO will not cause losses for Ukrainian producers.

Olga Zayets: “International Benchmarking for Electricity Distribution Companies in Transition Countries”

This paper is an attempt to study the performance of the electricity distribution countries in Ukraine, Hungary and Turkey. Applying Data Envelopment Analysis we found that Hungarian companies are most efficient, followed by those from Turkey and Ukraine.