
Abstract
The virtual economy argument for Russia suggests that barter allows the parties to pretend that the manufacturing sector is producing value by enabling this sector to sell its output at a higher price than its market value. We confront this prediction with the actual pricing behavior of industrial sectors in the Ukraine in 1997. Based on pricing data of 165 barter deals we find no systematic difference in the pricing behavior in barter across sectors. What appears to matter for the pricing behavior is whether the sector is on the selling or buying end of the barter transaction. We offer an alternative explanation which sees this pricing behavior as a mechanism to deal with the absence of trust and financial discipline in the economy.
Item Type: | Paper |
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Keywords: | imperfect input and capital markets ; the virtual economy ; trade credit ; trust ; contract enforcement |
Faculties: | Economics Economics > Munich Discussion Papers in Economics Economics > Munich Discussion Papers in Economics > Institutional Economics Economics > Munich Discussion Papers in Economics > Transition Economics Economics > Chairs > Chair of International Economics |
Subjects: | 300 Social sciences > 300 Social sciences, sociology and anthropology 300 Social sciences > 330 Economics |
JEL Classification: | D20, G30, O10, P30 |
URN: | urn:nbn:de:bvb:19-epub-73-0 |
Language: | English |
Item ID: | 73 |
Date Deposited: | 13. Apr 2005 |
Last Modified: | 26. Oct 2023, 19:47 |