Citation

Discussion Paper Details

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Title: Barter in Russia: Liquidity Shortage Versus Lack of Restructuring

Author(s): Sophie Brana and Mathilde Maurel

Publication Date: October 1999

Keyword(s): Barter, Non-Monetary Transactions, Russia, Transition and Virtual Economy

Programme Area(s): Transition Economics

Abstract: Barter in Russia can be explained by firms' liquidity constraint: it is strongly correlated with financial tightness. However, a microeconomic analysis reveals that the rationale behind this liquidity constraint is different according to the firm situation. For firms in a good economic situation, but faced with adverse selection problems and having no access to bank credit, barter acts as a substitute for short-term credit. While for indebted firms, barter, in the same way as external finance, is a way of avoiding costly restructuring.

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Bibliographic Reference

Brana, S and Maurel, M. 1999. 'Barter in Russia: Liquidity Shortage Versus Lack of Restructuring'. London, Centre for Economic Policy Research. https://cepr.org/active/publications/discussion_papers/dp.php?dpno=2258