Econometric analysis of managers' judgements on the determinants of the financial situation in Russia

The paper presents an econometric analysis of the determinants of the finan cial situation in Russian manufacturing. Official statistics in Russia are not reliable. This is why the analysis is based on business opinion surveys carried out within 'The Russian Economic Barometer' long-term research pro gramme for monitoring and investigation of the transition to the market in Russia. The new adaptive approach elaborated by the author of the paper is used to form a correct set of explanatory variables in regression equations . This approach is based on the comparison of the forecast abilities of alt ernative models with different sets of explanatory variables. Two periods a re considered and compared: January 1993 to January 1995 and February 1995 to January 1998. Two variables, the diffusion index of output and the avera ge order-book level, provide the best explanation of the managers' judgemen t regarding the financial situation in Russia for the first period. It was found that for the second period, the influence of the 'output index' dimin ished. The main factors with which managers related a 'good' financial situ ation in their enterprises were the sample average of order-book level, the stocks of finished goods, the index of order-book level, the index of outp ut prices ratio, and the indebtedness to banks. All relationships are prese nted in the context of linear probability and logit models.