This article examines the role of the banking channel in transmitting Russia's monetary policy. As the financial market is forming and data samples are increasing, there are emerging new conditions for getting a deeper insight into various aspects of monetary policy conducted by the Bank of Russia. The article explores the dependence of bank lending on monetary policy. The author tries to establish whether there are causal statistically significant instruments of monetary policy for the volumes of corporate lending. As independent variables, the author investigates the impact of the monetary base, the money supply, the refinancing rate, and the interbank lending rate. The assessment was conducted using the generalized method of moments. Based on a quarterly sample of data from 2002 to 2013, the author establishes the statistically significant impact of the money supply, the monetary base, the interbank lending rate, and the refinancing rate. The resulting empirical findings substantiate the hypothesis about the existence of a bank lending channel in Russia.
Subject. This paper examines how to determine the cost of equity for a developing economy, if the latter is segmented from the leading developed economy of the world.
Objectives. The aim is to establish the importance of determining the cost of equity in the Russian economy, depending on the country of the developed market.
Methods. All well-known international methods for determining the cost of equity, taking into account the country risk, are involved in the analysis. For calculations, I use yields of the world’s important market indices.
Results. The study shows that the value of equity capital (subject to country risk), which is established under all international methods for the reference market of European developed countries, will be lower.
Conclusions. CAPM models, used for developed markets, produce too low cost of capital, when they are applied as-is to developing countries. Therefore, for developing countries, models are used, which rest on the idea of adding a country risk premium to the risk premium, for the reference market of a developed country. This theory does not regulate the choice of a reference market from among developed countries. However, some studies found that the US market is not the most influential for the Russian market. The paper states that the choice of European developed countries provides a 16.8% reduction in the cost of equity, which, in turn, provides an increase in company value by a third.
Faced with the question as to whether failure prediction models (multiple discriminant and logit analysis) from different countries can easily be transferred to other countries, this study examines the validity of a range of models on a dataset of Belgian company accounts, both when using the original and re-estimated coefficients.Firstly, contrary to expectations, models that show bad performance results with the original coefficients reveal an improvement after re-estimation of the coefficients, while models that perform well reveal a decrease in performance. On average, the failure prediction power of the models deteriorates after re-estimation of the coefficients.
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