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This study examines economic activity measured with firm performance indicators using the changes in intensity of night-time light in four CAREC economies: Azerbaijan, Georgia, Kazakhstan, and Mongolia. The empirical analysis is based on the World Bank Enterprise Survey (WBES) data for 2019 and a follow-up survey conducted during the COVID-19 pandemic. The Enterprise Survey dataset was enhanced with data on night-time light intensity from Google Earth and the strictness of "lockdown-style" policies, i.e., the stringency index from Hale et al. (2021). Using the probit regression model, this study investigates the impact of COVID-19 on firm performance and night-time light in CAREC countries. Firm performance is measured using four variables: decrease in sales, demand, export share, and working hours. Our results show that, as the night-time light increases, the likelihood of performance deterioration is reduced. Larger firms are more likely to maintain their performance than smaller firms. The sales in the manufacturing, clothing, and services sectors are more likely to decline than those in the food sector. Accordingly, the results point to a significant decline in the performance of firms operating in the service sector compared with those in the food sector during the pandemic.

This study empirically investigated the factors affecting firms' ability to adjust production in response to the COVID-19 outbreak. This study used firm-level survey data from the Enterprise Survey implemented by the World Bank Group, including a standard Enterprise Survey (Baseline) and two waves of Follow-up Surveys conducted in 2020 and 2021, which included questions related to COVID-19 and firm behavior during the pandemic. We used data from four CAREC member countries: Azerbaijan, Georgia, Kazakhstan, and Mongolia. Using a probit model, we studied how different factors, including firm characteristics and government policy, affected the probability that a firm would be able to adjust its activities to the changed conditions. The results showed that firms which successfully adapted to the COVID-19 crisis were younger, foreign firms that had been innovative in the recent past, with female managers, a formal firm strategy with key performance indicators, and their own website.

Together with joining the Eurasian Economic Union, the risks associated with the harmonization of taxes become an urgent problem. VAT can be used as an effective tool in the perspective regulation of social and economic consequences of these risks. The tax policy carried out without taking into account the features of the VAT led to negative results in previous years. The purpose of this paper is to consider the risks and opportunities for further reforms by determining the relative merits and disadvantages of VAT in relation to other taxes. The results of this study revealed that VAT in Kyrgyzstan was mainly used as a tool for solving short- and medium-term financial problems related to budget deficit, instead of long-term social and economic problems

The aim of this study is examine the relationship between cost efficiency and quality of the loan portfolio in the banking sector of Kyrgyzstan. This study adopt stochastic cost frontier approach proposed by Battese ve Coelli (1995) to unbalanced panel data set captured 23 commercial banks for period of 2000-2013. Inefficiency term assumed to be distributed as truncated normal. We used transcendental logarithmic functional form specification in approximation of the cost function. Inputs and outputs of banking are determined following to modified financial intermediation approach. Assessed cost efficiency scores of Kyrgyz banks calculated averagely at level of 0,766. Average cost efficiency scores of domestic, foreign and public banks are 0,848; 0,649 and 0,875, respectively. Overall results reveal some signs supporting "risk aversion" hypothesis and “bad luck” hypothesis, but to a lesser extent "moral hazard" hypothesis and “bad management” hypothesis, The aim of this study is examine the relationship between cost efficiency and quality of the loanportfolio in the banking sector of Kyrgyzstan. This study adopt stochastic cost frontier approachproposed by Battese ve Coelli (1995) to unbalanced panel data set captured 23 commercial banksfor period of 2000-2013. Inefficiency term assumed to be distributed as truncated normal. We usedtranscendental logarithmic functional form specification in approximation of the cost function.Inputs and outputs of banking are determined following to modified financial intermediationapproach. Assessed cost efficiency scores of Kyrgyz banks calculated averagely at level of 0,766.Average cost efficiency scores of domestic, foreign and public banks are 0,848; 0,649 and 0,875,respectively. Overall results reveal some signs supporting "risk aversion" hypothesis and “bad luck”hypothesis, but to a lesser extent "moral hazard" hypothesis and “bad management” hypothesis., Целью данного исследования является изучение взаимосвязи между экономическойэффективностью и качеством кредитного портфеля в банковском секторе Кыргызстана. Наоснове метода стохастического фронтирного анализа рассчитана модель, предложеннаяBattese ve Coelli (1995), для несбалансированных панельных данных, охватившая 23коммерческих банка, на период 2000-2013 гг. Ресурсы и результаты банковскойдеятельности определены в соответствии с модифицированным подходом к финансовомупосредничеству. Предполагается, что неэффективность имеет усеченное нормальноераспределение. Функция издержек аппроксимирована с использованием трансцендентальнойлогарифмической функциональной формы. Показатели эффективности по затратамкыргызских банков рассчитаны в среднем на уровне 0,766. Средние показателиэкономической эффективности отечественных, иностранных и государственных банковсоставляют 0,848; 0,649 и 0,875 соответственно. Общие результаты указывают на признаки,поддерживающие гипотезы «неприятия риска» и «неудачи», но в меньшей степени гипотезы«морального риска» и «плохого управления».

In this paper we seek to investigate differences between banking cost efficiencies among commercial banks in Central Asian countries and Mongolia. In analysis different approaches to liberalization and natural resources exporting characteristics of these countries have been focused as one of the main determinants for cost efficiency variation. Cost efficiency scores estimations are based on transcendental logarithmic stochastic frontier panel data model proposed by Battese & Coelli (1995). Dataset used in the study includes period of 2007-2013. Results indicate that less liberalization policy in the banking systems cause low intensity of competition, which in turn characterized by monopolization of banking sectors by large state owned banks. This tendency results in the low efficiency of commercial banks. Monopolization along with the relative abundance of financial resources accumulated through the export of natural resources and constraints on banking activity may lead to a situation described as “quiet life hypothesis”, В данной работе исследованы различия показателей эффективности по издержкамв банковских секторах стран Центральной Азии и Монголии. В качестве основногофактора различия эффективности банковской деятельности рассматриваются уровеньлиберализации экономики и объем экспорта энергоресурсов. При расчете показателяэффективности по издержкам банковских секторов был применен методстохастического фронтирного анализа на основе транслогарифмической модели,разработанной Battese & Coelli (1995) для панельных данных. В работе использованыпанельные данные с охватом периода с 2007 по 2013 г. Результаты исследованияпоказывают, что меньшая либерализация экономики приводит к слабой конкуренции имонополизации банковского сектора крупными государственными банками и книзкому уровню эффективности по издержкам банковских секторов. Изобилиефинансовых ресурсов, полученных от экспортирования энергоресурсов и ограниченийв банковской деятельности, может привести к ситуации, объясняемой гипотезой,известной в литературе как «quiet life hypothesis»., In this paper we seek to investigate differences between banking cost efficiencies amongcommercial banks in Central Asian countries and Mongolia. In analysis different approachesto liberalization and natural resources exporting characteristics of these countries have beenfocused as one of the main determinants for cost efficiency variation. Cost efficiency scoresestimations are based on transcendental logarithmic stochastic frontier panel data modelproposed by Battese & Coelli (1995). Dataset used in the study includes period of 2007-2013.Results indicate that less liberalization policy in the banking systems cause low intensity ofcompetition, which in turn characterized by monopolization of banking sectors by large stateowned banks. This tendency results in the low efficiency of commercial banks.Monopolization along with the relative abundance of financial resources accumulatedthrough the export of natural resources and constraints on banking activity may lead to asituation described as “quiet life hypothesis”.

The weak development of the banking sector in Kyrgyzstan in the independence period has caused an amplification of the informal financial system. The non-banking financial organizations are still operating actively. According to the survey conducted in 2013, significant part of the population prefers to borrow from relatives and friends. Also, respondents have indicated that less bureaucracy in access to credit is the main reason for preferring non-banking financial enterprises., Слабое развитие банковского сектора в Кыргызстане в период независимости привело к усилению неформальной финансовой системы. Небанковские финансовые организации продолжают активно работать. По данным опроса, проведенного в 2013 году, значительная часть населения предпочитает заимствовать у родственников и друзей. Кроме того, респонденты указали, что меньшая бюрократия в доступе к кредитам является основной причиной предпочтения небанковских финансовых предприятий.