Yevhen Bukhinchenko: IMPACT OF TRADE BARRIERS ON FIRMS’ PRODUCTIVITY AND EXPORT REALLOCATION
This work examines the effect of Russian trade restrictions on Ukrainian manufacturing exporters using difference-in-differences OLS estimation. Furthermore, this paper compares the productivity levels of exporters to Russia with other exporters and provides the estimates of productivity trajectories for different types of exporters within 2 years from entering/exiting the export market. Finally, this thesis provides the decomposition of aggregate annual productivity changes of all exporters into two effects: own-productivity effect and export reallocation effect. Based on the KSE data center firm-level data for 2001-2015 it is shown that there is a significant negative effect of trade barriers on Ukrainian manufacturers. It is also proven that exporters to Russia on average are less productive than exporters that do not trade with Russia. The estimated productivity trajectories clearly indicate the productivity gains from entering export market and productivity losses in the case of exits. The positive reallocation effect of exporting to countries other than Russia on aggregate productivity change of all exporters shows that more productive firms reallocate their exports from Russian direction towards more lucrative countries. All these results imply that Ukrainian manufacturers should orient their trade activity to some developed countries in order to benefit from learning by exporting and boost their own productivity.
Yaroslav Kheilyk: BIDDING STRATEGIES IN PROCUREMENT-RELATED TWO-STAGE AUCTIONS
The focus of this research is on examining the model of the two-stage auction where the one object is sold on. In the paper, bidders’ strategies are derived for the first and second rounds in the case of two players depending on players’ type. Bidding strategies for the first round are compared to equilibrium bidder’s strategies in the standard first-price sealed-bid auction, and the auctioneer’s expected revenue is contrasted with the auctioneer’s revenue in the first-price sealed-bid auction.
Dmytro Skorokhod: THE INFLUENCE OF NEGATIVE INTEREST RATE POLICY ON BANKS’ PROFITABILITY
«You can read Adam Smith, you can read [John Maynard] Keynes, you can read anybody and you can’t find a word to my knowledge on prolonged zero interest rates – that is a phenomenon nobody dreamed would ever happen» – Warren Buffett told in an interview a year ago. His words reflect the reality of current monetary policy in which central banks go into uncharted territory by using negative interest rates. Today, if you randomly buy developed country bond, there is 1 in 3 chance that you will lose your money if you hold it to maturity, meaning investors are paying to lend to those governments. Three years of negative interest rates environment created unprecedented challenges for the financial system and banking industry in particular. Using a quarterly data of 500 banks from 33 OECD countries for the period from 2009 to 2016 we found that implementation of negative interest policy led to a relative decrease in profitability, measured by return on assets, by 12-15 bp. This change is both statistically and economically significant, which gives us the basis to discuss the effectiveness of monetary policy conducted by the central banks.