The recipients of this year's research award from Eesti Pank in the doctoral category are Gaygysyz Ashyrov and Helery Tasane for their research article, which analyzes the interconnections between firm-level innovation, ownership structure, and the experience of bribery demands in developing countries. The prize in the Master’s category was shared between two Master’s theses defended at Tallinn University of Technology in 2024: Alice Mikk received the award for her research on labour tax evasion, and Triin Bulõgina for her study on the impact of second-pillar pension reforms on the financial behaviour and economic status of young people.

Tairi Rõõm, head of the research division at Eesti Pank, who led the evaluation of the submitted papers, noted that, as in previous years, the works submitted for the competition were both highly relevant and of a high academic standard. The studies address topics that are current and important for Estonia and involve high-level research.

In their research article The Roles of Foreign and Domestic Ownership in the Corruption-firm Innovation Nexus, Gaygysyz Ashyrov and Helery Tasane analyzed the relationships between bribery and various types of innovation among companies operating in developing countries. They explored whether the relationships between bribery and innovation differ for domestically and foreign-owned firms. Their analysis used data from the World Bank’s Enterprise Surveys and other public World Bank databases. The study included over 4,000 exporting companies from 34 developing countries. The research found that in countries with weak institutional environments, corruption can serve as a means to overcome bureaucracy and accelerate innovation (the so-called "greasing the wheels" hypothesis). However, the award winners emphasize that this applies to developing countries where productivity and overall level of innovation are low, which may partly result from long-standing corruption. Corruption gives a competitive advantage to some market participants, which can lead to market distortions and reduce companies' willingness to invest in productivity growth. The findings are significant for policymakers in developing countries, showing that productivity-focused innovation initiatives increase the likelihood of bribery demands, thus harming long-term economic development. The award committee considered that the strength of the winning work at doctoral level was its well-argued and academically highly proficient analysis.

In her master's thesis Firm-level Predictors of Labour Tax Evasion, Alice Mikk found, based on Estonian data, that labour tax evasion is more common among firms with only one employee. The laureate suggests that to improve labour tax revenue collection, efforts should focus on efficiently incentivizing single-employee firms. In her master's thesis The Impact of Second Pillar Pension Reform on the Financial Behaviour of Young People, Triin Bulõgina concluded that those who opted out of the second pension pillar saw short-term improvements in their financial situation, but in the long term, they had no additional savings. The research also established that the pension money was used in a non-targeted way, with a large portion of the accumulated savings spent on everyday consumption. This conclusion is consistent with the findings of studies on early pension withdrawals in other countries (e.g., Australia, Chile, and Singapore). The impact analysis based on youth data showed that the withdrawals form II pillar pension savings were not primarily used for individual investments or to grow pension assets in an alternative way, highlighting the need to steer young people towards starting to save again for their pensions, through additional contributions to funded pensions for example.  According to the author, it is important for young people to understand how leaving the second pension pillar can affect their pensions in the future. The award committee considered that the strength of both master's-level research papers was their topicality and their skilful use of modern econometric methods for the analysis.

The research awards will be presented on December 5 at a research seminar hosted by Eesti Pank.

Background Information

The research awards, dedicated to the memory of Urmas Sepp, will be presented by Eesti Pank in 2024 for the 22nd time. The aim of the research competition is to recognize outstanding research, encourage scientific work in the field of economics, and value studies aimed at obtaining an academic degree. Since 2011, the research awards have been presented in two categories: research based on a doctoral dissertation or conducted during doctoral studies, and research based on a master's thesis or conducted during master's studies. Urmas Sepp (1956–2002) was head of Eesti Pank’s macroeconomics department from 1993 to 2002, later heading the economic research department.

Additional information:
Viljar Rääsk
Head of Communications
Eesti Pank
6680 745, 5275 055
Email: [email protected]
Press enquiries: [email protected]