The research awards of the central bank were given this year to three pieces of research into the behaviour of Estonian exporters, the mismatch between the skills of workers and the needs of employers in the Estonian labour market, and the connection between economic activity and corruption in former Soviet states. The awards will be handed out at the museum of the central bank on 4 November.

There were 12 research works submitted to the competition in 2021, with three in the doctoral category and nine in the master’s work category. Head of the research unit at Eesti Pank Tairi Rõõm, who led the assessment of the works, said that it was difficult to choose this year as the quality of the work submitted was high. “This demonstrates the strong research potential of young Estonian economic researchers, and the good level of education in economics in Estonia,” she said.

The winner of the Eesti Pank research award in the category of doctoral work was Mathias Juust of the University of Tartu for the article Trade effects of a negative export shock on direct exports and wholesalers. The research considered how the broad reduction in demand for exports in 2014 affected the behaviour of exporters working from Estonia to Russia. The annexation of Crimea by Russia in 2014 was followed by sanctions from Western countries and counter-sanctions from Russia. The global price of oil dropped in the same year causing the rouble to depreciate, and that affected general demand for imports from Russia. Mathias Juust analyses how Estonian businesses exporting goods to Russia reacted to the deep negative demand shock, and shows that wholesalers were better able to redirect flows of goods than retailers were, and that companies with high productivity levels coped better. The award-winning research by Mathias Juust into the redirection of export flows is very relevant right now given the problems in supply chains caused by the Covid-19 pandemic.

The Eesti Pank research awards in the category of master’s-level work went to Pauline Kommer and Danyl Denysenko. The master’s thesis Mismatch decomposition in the Estonian labour market by Pauline Kommer of Tallinn University of Technology is particularly recognised for its very strong grasp of theory and the high quality of its empirical analysis. The work analysed how serious the problem of the mismatch of skills in the Estonian labour market is in different regions and sectors. This topic is very relevant during the recovery in Estonia from the pandemic, as one of the main drags on economic growth is the difficulties faced by companies in finding appropriately skilled employees.

The master’s thesis Corruption and economic growth: new evidence from satellite data by Danyl Denysenko of the University of Tartu researched the links between corruption and economic activity in former member states of the Soviet Union. Denysenko measured economic activity with an innovative big-data method that used data from satellites on the intensity of lighting at night. The work demonstrated that corruption is a hindrance to economic growth. The research stood out particularly for the innovative approach taken by the author for measuring actual economic activity in countries where the official growth figures may be distorted because of statistical manipulation or the large size of the unofficial economy.

The Eesti Pank research award in memory of Urmas Sepp is being granted for the 19th time in 2021. The research competition is intended to bring attention to outstanding research work, encourage scientific work in economics, and to promote studies that can lead to academic degrees. Since 2011 the award has been granted in two categories, one for research leading to a PhD thesis or done as part of doctoral studies, and the other for research leading to a master’s dissertation or done as part of a master’s course.

Urmas Sepp (1956–2002) was the head of the Eesti Pank macroeconomics department, later the economic research department, from 1993.

Additional information:
Ingrid Schmuul
Communications Specialist
Eesti Pank
Tel: 668 0965, 5697 9146
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