Capital market deepening, Governor’s characteristics and Russian regional enterprises: A big data analysis

Kazi Sohag*, Tomas Kliestik, S.M. Riad Shams, Oleg Mariev, Natalia Davidson

*Corresponding author for this work

Research output: Contribution to journalArticlepeer-review

Abstract

We measure the impact of the bank credit disbursement on Micro, Small and Medium Enterprises (MSME) growth, incorporating the role of regional governors’ characteristics in the case of 84 regions of the Russian Federation. Given the considerable heterogeneity across regions, time and reverse causality, we applied the Panel Quantile Regression via Moments (MM-QR) approach to analyze monthly frequency big data (2016M1–2021M1). Our empirical investigation demonstrates that bank credit disbursement and MSME growth follow a non-monotonic relation, implying that up to the specific size of the credit is detrimental, but after surpassing the threshold size, it is supportive to MSME growth under each quantile. Regional governors’ political and economic liaison with the federal government impede MSME growth under different quantiles of MSME growth. Our findings further infer that credit market deepening along with firms’ individual characteristics are crucial for enterprise performance in the current time of digital transformation. We provide several policy implications.
Original languageEnglish
Pages (from-to)340-352
Number of pages13
JournalJournal of Business Research
Volume149
Early online date25 May 2022
DOIs
Publication statusE-pub ahead of print - 25 May 2022

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