Transactional approach in assessment of operational performance of companies in transport infrastructure

Transcription

1 MPRA Munch Personal RePEc Archve Transactonal approach n assessment of operatonal performance of companes n transport nfrastructure Valery Dubrovsky and Natalya Yaroshevch and Evgeny Kuzmn Ural State Unversty of Economcs, Ural State Unversty of Economcs, Ural State Unversty of Economcs March 2016 Onlne at MPRA Paper No , posted 14 June :12 UTC

2 Transactonal Approach n Assessment of Operatonal Performance of Companes n Transport Infrastructure Abstract: Purpose: Offer an alternatve method to assess operatonal performance of companes n transport nfrastructure of a regon by makng a comparson between transacton costs. The method s supposed to be a cross-functonal and possbly appled to an analyss of economc enttes of a dfferent order (country, regon, sector, companes) whle evaluatng vscosty / complexty of the outsde and the nsde. Desgn/methodology/approach: The paper ncludes an analyss of varous methodologcal approaches to assess a development level of the transport nfrastructure n a regon. Wthn the author's approach and for purposed of the research, an ndex of transacton capacty or the transactonalness ndex s proposed, whch determnes a level of transacton costs calculated aganst the cost of producton and revenue. The approach s ploted usng the regon-wse consoldated fnancal data of companes nvolved n the Russan transport nfrastructure for 2005/2013. Fndngs: The proposed alternatve way to measure corporate operatng effcency has proved ts academc consstency. A specfc comparson between the transacton costs usng the transactonalness ndex allows frst to dentfy companes or regons/sectors, where there s excess complexty of economcal communcaton n barganng. Secondly, the ndex does not only pont out ndrectly to a degree of development n the nsttutonal envronment, but also the nfrastructure (the transport one n the example gven). Thrd, the transactonalness level may say of uncertanty and rsks. As an addton to theoretcal and methodologcal aspects of transacton costs, the authors justfy an approach to ther sze estmaton, as well as ther dfferentaton dvdng them nto two groups: those of a natural type and a background type. In a course of ther dscusson, the authors have concluded that there are such transacton costs n place, whch are standard n a manner of speakng. Orgnalty/value: There s a dscusson whether t s scentfcally reasonable to use an ndex of transactonalness. There are reasons for applcablty of the alternatve approach to assess operatonal performance of companes n transport nfrastructure as an ndcatve crteron of favourng external condtons to execute exchange transactons. Accordng to the authors, a hgh level of transactonalness s assocated wth a low development level of transport nfrastructure n a regon. Ths says that ther compettveness s specfcally less. Keywords: transactonalness, transport nfrastructure, transacton costs, performance of transport nfrastructure.

3 1. Introducton Wth ts leadng poston n manufacturng and socal subsystems of a regonal nfrastructure, transportaton, along wth economc relatons that mantan ts functonng, s the most powerful factor n a dstrbuton of productve forces. Its avalablty consderably contrbutes nto an acheved mage and a lvng standard, beng a necessary condton for busness development, an assessment of a potental and nvolvement of economc actors wthn the economc process and an attrbute of compettve advantages n a regon. The meanng of transport and corporate operatng effcency n the sector are partcularly obvous n geographcally extensve regons. Russa s a representatve example, where a dstance between contractors may serve as a factor that generates a closed economc loop and ndependent regonal subsystems (Krylov & Runova, 2008). It s gettng evdent that the homogenous economc system s only possble to be acheved when there s effcent communcaton between all ts consttuents. It s the transport nfrastructure that defnes condtons for a free crculaton of materal goods, labour and other resources (Molle, 2004). At the same tme, a number of features, such as a terrtoral extenson of Russa, ts resource base remote from places of processng and producton, as well as tme to move commodty flows predefne avalable challenges that mpose qute a specfc lst of requrements to development of the transport nfrastructure. Smplcty, ease and a speed n cargo handlng are the most clear and obvously essental characterstcs of capactes n the transport nfrastructure n a regon. Ther mprovement, on the one hand, contrbutes nto a potental for an economc growth n a regon. On the other hand, ths s a factor, whch decreases a sgnfcant volume of overhead. Ultmately, a smoothly runnng operaton of the regonal transport nfrastructure should result n unnterrupted processes of reproducton to ensure a sgnfcant speed-up n the captal turnover. Such a concluson s anyway suggested by the logc of a causal analyss. A process of makng the transport nfrastructure of a regon cannot do wthout tools to assess ts effecency. It becoms mportant here to understand a multdmensonal nature of the transport performance effect as such. Absolute and relatve ndcators descrbng a length of communcaton arteres (Jnlong, 2003; Haywood, 2012), the cargo turnover (Zhang, 2009), locaton densty for roadsde servce facltes (Thrall, 2002; Ray, Wer & Hopp, 2003) etc. cannot fully descrbe a contrbuton and an mpact of the transport nfrastructure on other economc sectors. Ths evdently ponts out to a scentfc problem of the research, a meanng of whch comes down to a search for cross functonal tools to assess a qualty of the transport nfrastructure (as a reseach object), as well as a sort of vscosty of the economc space. The latter s for the most part relevant to nsttutonal constrants - n ncompleteness of rules, standards and mechansms of proper behavour (nsttutonal protocol), as well as complexty of communcaton, barganng and formalzng terms of a deal. A search for a soluton to the mentoned scentfc problem s n lne wth development of the author's approach, based on fndngs from a crtcal dscusson of exstng ways and concepts. At the same tme, t can be summarzed from the revew of lterature that n tradtonal approaches to the economc analyss, there have been accepted a practce to express an assessment of a current condton of the transport

4 nfrastructure wth ndcators of the economc losses or the economc damage (Vocu & Lahr, 2012). Ths evaluaton s complemented wth a long lne of qualtatve descrptors, usually showng that there are sgnfcant dffcultes n nfrastructure for all modes of transportaton, mentoned by Sharon (2014) and Lahr & Yao (2004). The approach of such knd let us estmate the transport nfrastructure n a qute onesded way. Ths means that there s a methodologcal gap n the theory of the queston where a suffcent soluton to the problem would be an approved performance crteron dfferent from a tradtonal. In ths context, as a possble soluton to the problem, the authors propose for an academc dscusson to apply cross functonal ndex of transactonalness (see more n Kuzmn, 2013) to measure performance n a regonal transport nfrastructure. The ndex, although presentng a cumulatve nfluence of condtons that descrbe objectve dffcultes n busness (.e. exchange transactons), s n one or another way perceved by economc agents n a regon as restrctons for operatng optmzaton, n ts quanttatve estmates t descrbes a potental of commercal benefts from the transport nfrastructure development. Therefore, among the other thngs, t can serve as a technque to ground needs of a regon (area) n new or development of avalable transport nfrastructure facltes. The layout of the research s subject to the mentoned goals and objectves. The revew of lterature secton has refned approaches to assess the transport nfrastructure. The research methods nvolve such questons, as calculatng transacton costs and ther possble applcaton as an effcency crteron. The emprcal secton s based on an analyss of the transactonalness level for companes nvolved n transport nfrastructure n Russa for the last eght years untl Based on the research fndngs, respectve conclusons have been made. 2. Lterature revew 2.1. Approaches to assessment of transport nfrastructure To avod ambguty n ths research, we should say that the transport nfrastructure n a regon refers to a set of condtons for an exchange and a turnover of goods that determne performance n actvtes of economc agents n a local economc system. At the same tme, ths means that the condtons created for exchange transactons also determne a nature of admnstratve decsons regardng a choce of drectons and a way of dstrbuton. Modern economcs dstngushes several drectons to evaluate the regonal transport nfrastructure. They are those arbtrarly desgnated as ndustry-specfc, terrtoral and systemc. The ndustry-specfc approach s usually based on understandng the transport nfrastructure as a sophstcated system. Therefore, estmates come from a need, frst, to dentfy a condton of each ndvdual subsystem wthn the transport nfrastructure n terms of ts complance wth the requrements set (n one way or another) for the whole economc system (Jochmsen, 1966). Under ths approach, three components of the transport nfrastructure are dstngushed: tangble, nsttutonal and personal.

5 Followng the same prncple of a multdmensonal vew of a regonal transport nfrastructure, Russan economsts Stakhanov & Platonov (1993) thnk that producton (roads, channels, ports, warehouses, communcaton systems, etc.), socal, fnancal, nformaton and commercal components are apprasal objects. Obvously, a dstngushng characterstc of ths approach s multplcty of dstnct assessments of transport nfrastructure condton. Moreover, n some cases they requre ther ntegraton. However, there has been no known postve result from a search for a way of ntegraton, confrmed wth any wder applcaton. Other researchers go away from the mult-dmensonal dea of the transport nfrastructure, gvng specfc models to evaluate ts condton. Thus, Murzaeva (2013) gves reasons that t s reasonable to apply as an evaluaton tool the balance model of transport nfrastructure development wthn the meso-level economc system of the followng form: Σ Prt (1/(1+r)) Σ INVnf * (1+r), (1) where r dscount rate used to assess transport nfrastructure projects n a regon, a share; seral number of a year when a relevant nfrastructure project for whch a calculaton s made was completed; Prt total balanced fnancal result from actvtes of transportaton and logstcs provders n a regon resultng from a use of nfrastructure facltes; INVnf total ntal nvestments n regonal transport subsystems to mplement a project related to nfrastructure development. On the other hand, wthn the consdered approach they propose a large number of smple technques to evaluate the transport nfrastructure by ts target purpose as a crteron. An example mght be the transport servce ndex (TSI) accordng to Lahr & Yoa (2004). Calculatons made wth TSI show a monthly change to volumes of servces rendered by cargo and passenger carrers. However, an estmate receved n such a way, cannot be consdered economcs-specfc fully, as t does not mply an answer to a queston of a prce and a qualty of an acheved result. The second approach, terrtoral, s n the context of studes n locaton of ndustres wthn an economc system of a regon (see more n Lpec, Pulyarkn and Schlchter, 1999), whch s among other thngs descrbed wth a development level of the transport nfrastructure. Ths approach, the most common n economcs, s amazng owng to ts valuaton parameters. Among them, for example, accordng to Engel, there are an ndcator of transport networks densty. Uspensky mentons a rato of a network length to a geometrcal average of ts land area, populaton, and a total weght of cargos handled wthn ths freght network. Protodyakova mentons a relatonshp between a rate of supply wth lnes of communcaton and network traffc densty, takng nto account average densty of populaton and a natonal level of ndustral development. It s worth sayng that the terrtoral aspect n estmates of the transport nfrastructure development s usually present as a characterstc of condtons for an economc growth. A good example mght be Sharon J. Erenburg (2014) wth a model sayng that all countres n terms of development condtons are dvded nto three categores. They are so-called overloaded, ntermedate and laggng-behnd countres. There s another example, paper by Vocu & Lahr (2012) that proposes to use ndces to measure transport costs as a tool to assess condtons to make busness

6 n dfferent countres. Wth ther help, the authors defne countres wth more or less favourable condtons n terms of the transport nfrastructure. Dstngushng of the thrd approach to assess the transport nfrastructure s because other above-mentoned approaches do not take nto account a synergstc effect of the regonal transport nfrastructure. Therefore, a startng pont n the systemc approach s an dea of the transport nfrastructure as a growng pont. Gabrel, Mattey and Wascher (2013) agree wth ths vew. They say that a qualty of lfe n a country mproves and a standard of lvng ncreases f government expenses are manly focused on a growth n socal welfare through the transport nfrastructure development. Nadr (1996) has the same deas when llustrates an approach to an assessment of the transport nfrastructure wth macroeconomc models, functonally bndng economy-wde effects and transportaton actvtes. For more detals on the effect of the development level n the transport nfrastructure upon a regon's economcs, see Sue Wng (2007) and Lakshmanan (2011). The presented revew makes qute an obvous concluson that there are ambguous solutons to an objectve of the transport nfrastructure evaluaton. Although we cannot deny the fact that n some cases, a use of a certan approach depends on a nature of a set research goal. However, let us pont out to a common dsadvantage for all the above-mentoned approaches. None of them let us evaluate a qualty, wth whch the transport nfrastructure performs ts prncpal systemc functon,.e. provdng economc agents wth necessary condtons for an effcent exchange. Bearng n mnd that they are those condtons that set a level of transacton costs, the authors, among other thngs, propose an alternatve approach to ther measurement Transacton costs as parameter to assess economc systems Ideas on a nature and a content of transacton costs are hghly heterogeneous, but at the same tme, they have common fundamental statements. Many researchers have been nvolved n studes of transacton costs and ther mpact on enterprse actvtes. Among them, there are founders of scholarly tradtons n neoclasscal economcs, such as Coase, Arrow (1969), Stgler (1972), Eggertsson (1990), Mlgrom & Roberts (1992), etc. In the Russan economcs, transacton costs have been manly explored snce the end of the 20 th century. Later, they were developng together wth a general trend n the theory and practce of the ssue. Ther fundamental provsons are presented n Popov (2011), Shasttko (1997), Burkov (1999), Arhereev (2000), Kuzmnov, Bendukdze and Yudkevch (2006), Serebryakov (2007), Syrov (2008), Balsevch, Yudkevch and Podkolzna (2009). A calculaton of transacton costs n the economc system s a known methodologcal challenge. In ths regard, t s necessary to justfy the approach ntroducng the author's vew of both essental characterstcs of the transacton costs phenomenon, and a method to evaluate t. To solve the set objectve, let us refer to fndngs from the most authortatve papers. For example, n approaches to an assessment of transacton costs, Walls & North (1986) use a technque to separate a share of transacton sectors n economcs from a structure of the gross domestc product gong n two drectons,.e. non-transacton and transacton ndustres.

7 In estmates of transacton costs, Kokorev (1996) used data on a turnover n the Russan economcs as a whole, also takng nto consderaton overhead costs of companes. In hs defnton of transacton costs, Radaev (1999) took nto account the costs for an entry and an ext from a market, an access to resources, a transmsson specfcaton and protecton of ownshp rghts, establshment and mantenance of busness relatonshp. To solve a problem of transacton costs calculaton, Popov (2011) refers to the Tax Code of the Russan Federaton, he dentfes them as a part of the costs not ncluded n calculatons of a taxable base by the ncome tax. In hs research, each knd of transacton costs s assocated wth operaton of an economc nsttuton servng as a specfc attrbute to make a classfcaton of expendtures. Auzan (2006) s much more specfc wth a tax nature of a share n transacton costs, speakng of taxes due to the government as a necessty that lets us solve questons on specfcaton and protecton of property rghts. The context of the latter statement s nterestng as t allows to assume a use of taxes moblzed by the government, for example, to make and develop elements n the logstcs nfrastructure (transport, commercal, ndustral), desgned to create condtons to reduce by-transacton costs. On the other hand, taxaton mposes a fscal burden on companes and organzatons, leadng to an ncreased and explct transacton costs. Justfcaton of condtons and factors that determne the dynamcs and a nature of changes to transacton costs s the second major problem n neo-classcal concepts of transacton costs theory. Approaches to make the transactonal functon are very dverse and cted n many papers, n partcular n Jabusch (1985), Henesen (1992), Demchuk (2002), Popov (2009), etc. The functon may be bent n or convex, as Demchuk ponts out, dependng on observed negatve or postve effects of an exchange scale. It should be sad that changes to transacton costs, explaned wth the dynamcs and scales of operatons wth assets are perceved as realstc. However, the most researchers recognse a role of a transactonal functon as a bass to descrbe a prce mechansm coordnatng relatonshps between economc agents. In addton, at the same tme, t allows us to solve a problem of a search for an optmal balance between the supply functon for a certan amount of the mass of commodtes and the functon of a demand for a volume of resources requred for ts producton. Prcng aganst the mentoned functons of the supply and the demand mples makng a transacton. That s, the transacton s executed, f n an agreed way they acheve a certan optmum value n the prce dfference between a volume of the mass of commodtes and a volume of resources to produce t. Further detalzaton for the functon of transacton costs s unlkely to add anythng to partcular complexty n solvng the optmzaton problem for transacton costs. Its crteron should be understood as ncreasng performance of the economc mechansm, when overall utlty of goods consumpton (produced goods and servces) acheves ts acceptable levels. It s when seemngly there the relatvely stable and balanced economc system s provded. Nevertheless, rsks of economc agents n

8 each case, say, wll depend on changes to transacton costs. It means whether they ncrease or decrease per further unt of effect (goods and servces). Takng nto account that transacton costs are commonly understood as costs that accompany a relatonshp between economc agents (Kuz'mnov, Bendukdze & Yudkevch, 2006), an arthmetc approach of all knds to an assessment of transacton costs s conventonally applcable. Frstly, because of an avalable objectve crowd of transactons not shown n any reports and a large number of hdden exchange transactons (ncludng those executed n the shadow market). Secondly, and the most mportant, the wder a scope of the economc actvty of a company s, the more uncertan a boarder s, whch separates transformaton from transacton costs. Walls & North (1986) qute precsely notced a source for ths dffculty. In ther research, they say that, the hghest conceptual dffculty appears wth those transactons that occur wthn a company. (Walls & North (1986) Thus, n ts content, the transacton costs assessment does not only nclude the measurement problem as such, but also transacton costs observablty Authors vew on soluton to problem of transacton costs estmates The authors come from the fact that f there s a runnng company (that functons as a full unt coordnatng economc actvtes); a level of ts transacton costs depends on condtons, under whch any exchange transactons are executed. Moreover, these condtons should be taken nto account n makng management decsons that defne a partcular lne of corporate behavour n ts relatonshps wth contractors. Each ndustry and every company theren have ther own and dstnctve level of transacton costs. Maher (1997) ndrectly mentons ths phenomenon, although the most sgnfcant fndng from her research s an emprcal evdence of a specal meanng of the market structure n process when transacton costs are made. Popov follows the same ratonale and establshes a connecton between the transactonal functon and parameters of the economc envronment, n whch a transacton takes place. Besdes, we can say that varous ndustres (economc actvtes) and regons have dstnct, natural or underlyng levels (Note 1) of transacton costs. Natural refers to a standard to a certan extent level of transacton costs ncurred by companes of the same economc actvty or companes located wthn the same regon. However, companes n the same ndustry (economc actvty) from dfferent regons wll have a dstnct ndvdual level of transacton costs. In addton, n vrtue of specfcs of avalable regonal factors and terms, under whch the economc actvty s executed, there wll be observed the same trend. The underlyng level of transacton costs of companes n the same branch and the same structure of producton wll be sgnfcantly dfferent. It s the underlyng level of transacton costs, whch f not n tme of ncorporaton, then later allows us answerng the followng questons. How and why dd a company choose a gven locaton, and hence ts mmedate envronment, defned these volumes and producton methods, as well as n some cases, terms of consumpton for manufactured products and servces? Accordngly, how and why dd a company set for tself (company) the hghest acceptable rsk n exchange operatons wth other economc agents?

9 Then a range of devatons as a dfference between actual (ndvdual for each company and dependent on a varety of admnstratve decsons regardng a behavour of a company n ts relatons wth contractors) and natural (standard, predefned wth relatvely unchanged, but perfect lvng condtons of a company) levels of transacton costs wll be a bass to estmate ther (devatons) admssble ntervals. At the same tme, a necessary precondton to solve the problem s a search for a top-level of transacton costs, when we do not go beyond t and when an mpact of condtons mght be estmated as generally favourable to run a company. Thus, the problem s not the ndspensable transacton costs, but ther avalable normal value, desgnated by us as a natural or underlyng level. Ths leads to a concluson on a need n ratonng transacton costs, more precsely, a search for ther normal level to justfy a crteron of measured lvng condtons of a company. Although n the real lfe, the problem gets more complex than t seems at the frst glance. As a research on varous concepts has shown, wth regard to a soluton to a problem of cost ratonng, there s nether shared approach to a defnton of the standard, nor satsfactory formalzaton of an assessment as such for a standard level of transacton costs. Researchers usually apply an accepted conceptual apparatus, confrmng legtmacy of the avalable term of standard transacton costs (or standard as an opton). However, they do not dsclose a technque or an approach to estmate them. Here we may refer to Davdson (2002) ( standard transacton costs ) and Harrs (2003). The latter connects transacton costs wth the prce dfference between the supply and the demand. Therefore, they are understood as costs that offset the standard expensed for makng busness. We may also refer to Shcherbnn (2011), who proposed to control transacton costs wth a dynamc normal estmated aganst a number of ndcators not accounted n reportng forms. From our pont of vew, as transacton costs n general are caused by (exchange transactons) expenses, a soluton to the problem of transacton costs standardzaton, obvously, les n a feld of exchange operatons and s defned wth categores that descrbe them. Further, takng nto account ndspensablty n transacton costs n the exchange economcs envronment, a search for ther normal level should, however, be related to an dea of perfect condtons to mplement admnstratve decsons n the framework of certan plans and programs amed at makng a desred market status of a company. In other words, even n the perfect world of plannng and mplementng actvtes, any company ncurs transacton costs. Herewth, one of ther components, costs at a normal level, are always less than a total actual value. Such a stuaton s smlar to a case descrbed as a result of an mperfect vald economc mechansm compared to theoretcal concepts. Fnally, there s reason to say that reasons for varances between actual and standard values of transacton costs, wll be always unque. But obvously, dependent on specfcs of a corporate economc actvty, as well as an area of ts locaton. Summarzng all the above-mentoned, let us argue the followng. Transacton costs are costs n the open economcs. Multple contractors ncur them and therefore they nclude both the costs for mantanng drect and a reverse lnks between them (contractors), and recordng costs ( storage ) for these nteractons. In ths way we, anyway, understand a reason to offer a technque to calculate transacton costs, even wthout usng a typology of such costs (Note 2).

10 3. Methods 3.1. Estmatng transacton costs Accordng to the authors, theoretcally, for any level of the economc system, n estmates of transacton costs, t would be desrable to use the same ndcators. However, an obstacle here s a general case of relatonshps between contractors seen n a macro-economc aspect, as a need appears to solve a problem of double countng n cases when transacton costs n ther nature ncurred by an economc agent s partally a market revenue for other agents. It s qute natural n condtons of the so-called turnover closed-loop cycle, when a crowd of producton and economc relatons between contactors s mplemented as a lne of processes to exchange ntal transacton costs n ther part for real economc benefts. Then, f an assessment of transacton costs for a separate economc agent may have a double form, we may reasonably assume that an estmate of actual transacton costs when there s no turnover closed-looped cycle s ndependent. In these crcumstances, t seems reasonable to a certan extent and n an economc sense to propose estmatng transacton costs connected to the economc system of contractors by deducng the proft and producton cost from a total revenue of an agent (obtaned dfference, though wth certan loopholes, ncludes marketng charges and busness management cost), followed by all the results summed up. Undoubtedly, such an approach to an evaluaton does not only need an essental refnement, but also requres many assumptons lke, for nstance, those that follow. Frst. Exchange transactons of all economc agents n an area are closed n a sngle economc system and medated by relatonshps wth elements of a certan (local, regonal) transport nfrastructure. Its maturty s nothng else but a set of external and nternal crcumstances that are always perceved by those who make prncpal management decsons. Followng mplementaton of such decsons creates precondtons for a company to acheve a certan level of transacton costs relatve to underlyng ones. So, benefts from the advanced nfrastructure used approprately n management decsons potentally nfluence dfferent projects of a company to be successful. At the same tme, t should be expected that a level of transacton costs of a company wll declne wth a trend to reach ts threshold n number,.e. a level of underlyng costs. Second. There s no problem of a cumulatve effect that occurs when we add transacton costs of each par of agents nteractng n exchange transactons. In other words, every economc agent s autonomous; therefore, there s no problem of accountng so-called ntermedate consumpton of transacton costs. Thrd. Taxes, pad to the government by economc agents, undoubtedly nclude transacton costs, a course for whch s requred specfcaton and protecton of property rghts. One should also keep n mnd other assumptons establshed n the research. Under these condtons, a mathematcal equaton of an evaluaton approach can be separately represented as follows: TC CC MC Tp or TC CC MC P T, (2)

11 where TC transacton costs of the - th enterprse or organzaton; CC sellng expenses; MC admnstratve expenses ; Tp ncome tax; P proft before tax; T ncome tax rate. In the gven equaton (2), an enterprse (organzaton) s seen as a separate busness unt or a separate economc entty that has to occur certan costs for exchange transactons n the regonal nfrastructure. However, f for some companes, a purchase of a specfc good s a producton and technologcal necessty, then for the others t s as the prncpal type of actvty. Therefore, accuracy n an evaluaton of transacton costs mght be only acheved at a level of relatonshps of each economc agent. Then, f at the same tme, we take nto account the entre varety of agents, we may say that there appears an effect of the ntermedate consumpton of transacton costs. It gets obvous that n the economc system, t s reasonable to use a consoldated value of all the transacton costs, except for a value of ther ntermedate consumpton. In ths case, a calculated resdue of transacton costs serves as a tool to ensure contnuty and a rhythm n an overall manufacturng process. A desred value of transacton costs at the nfrastructure level n the economc system can be represented as follows: m TC TC 1 IC, (3) where TC transacton costs n economc system; IC ntermedate consumpton of transacton costs; m number of companes n a partcular economc system. In terms of practce, a defnton for ntermedate consumpton of transacton costs may be gven usng a system of natonal accounts and gudelnes to calculate the gross domestc product or the gross regonal product. As far as a calculaton of the ntermedate consumpton of transacton costs s complex from a methodologcal pont of vew and as a specfc ndex wll be approxmately the same value for each regon, then t s possble to neglect a comparatve analyss. Herewth, a qualty of comparatve assessments wll not be subject to changes Transaсtonalness as performance crteron for regonal transport nfrastructure Across all regons n the regonal economc system, each company has ts own and dstnct level of transacton costs. Maher (1997) ndrectly mentoned ths phenomenon, although the most essental fndng from her research s an emprcal evdence of a specfc sgnfcance of the logstcs nfrastructure n the economc system n processes to defne transacton costs. Popov adheres to the same logc and establshes a connecton between the transactonal functon and parameters of the economc system host for a transacton. We mght brefly defne a meanng of transactonalness wth the envronment vscosty term, where the envronment refers to ether a feld of actvty or a locaton of a producton and commercal faclty. Orgnally, Shevyakov & Klener (1993) ntroduced and used the term of envronment to descrbe comparatve terms to establsh and launch producton. In ther work, they drectly assocate envronment

12 vscosty wth uncertanty and rsks, to whch an economc agent wll be subject. They say, the hgher envronment vscosty s, the more dffcult t s to send resources n a rght drecton and at a rght tme to fght aganst an adverse concdence of events, and the hgher degree of a rsk s understood as a permanent envronmental factor (Klener, 1994). In later works, Klener focuses on a descrptor of envronmental vscosty defned as addtonal sgnfcant, sometmes excessve efforts (Klener, Tambovtsev & Katchalov, 1997) n matters of resource handlng to start manufacturng process. However, the most mportant remark relates to what predetermnes envronmental vscosty and to what extent t nfluences functonng of enterprses and organzatons n the real sector of economy. Klener says that vscosty of an economc envronment does not only generate precondtons for nequalty n functonng condtons of dfferent sectors and regons, but also of separated but closely located enterprses n the same ndustry, makes t dffcult to algn lvng standards of the employees (Ibdem, 26). Takng nto account that to descrbe vscosty of the envronment, there have not been submtted any reasonable ndcators so far, ndependent and not nvolved n a measurement of other parameters of a busness system or an economc agent, therefore we beleve that they are terrtoral and sectoral transactonalness that mght become well-deserved ndcatve crtera to defne a degree of the envronment vscosty. Herewth, companes n the same ndustry (actvty) from varous regons wll not have the same ndvdual volume of transacton costs. A dfference wll be n a strategc poston and an acceptable rsk, whch companes have defned for themselves n the economc system. Thus, the ntroduced concept of transactonalness defnes a cumulatve effect of both external and nternal condtons, whch are n one or another way consdered by persons, who make fundamental manageral decsons. At the same tme, wth an evaluaton of transactonalness, t s gettng possble to justfy a need of a regon (area) n new or development of avalable transportaton facltes. Then, say, the most nfrastructure facltes establshed wth the natonal government partcpaton under projects of publc-prvate partnershps are the very mechansm that helps to solve a challenge of a ratonal dstrbuton of productve forces. The transactonalness value determnes whether an ndustry (an economc actvty) or a regon as such s attractve (favourable) for an actvty of an enterprse, a company or an organzaton. An economcal meanng of the transactonalness ndex s essentally an assessment of a volume of unproductve costs attrbuted to a value of transformaton (producton) costs. Then, the producton cost wll represent transformaton or producton costs. However, the specfc value of the transactonalness s much ndcatve n a calculaton towards a value of revenue, as t represents an overall load. As a result, an optmal form to calculate transactonalness by producton s the followng equaton:

13 TC TC TCE, TCE and % 100 PC PC (4) where % TCE TCE transactonalness of the - th enterprse or entty; transactonalness gven n %%. PC producton cost; Takng equatons (3) and (4) as a bass, we can estmate transactonalness n the transport nfrastructure for the economc system of a natonal/regonal level usng the followng formula: TCE m 1 TC PC IC or TCE m 1 m 1 TC IC PC IC, (5) where TCE n absolute terms; nfrastructure transactonalness n natonal/regonal economc system PC consoldated value of producton cost; IC value of ntermedate consumpton n relatonshps between economc agents n natonal/regonal economcs. A logc n the author's approach comes from an assumpton that a hgh value of transactonalness, n ths case of areas wth a relatvely low development level of the transport nfrastructure, reduces enterprse compettveness and prevents an enterprse from sales wth a hgher beneft for themselves. That n turn causes numerous market rsks for an enterprse. At the same tme, t s not only crucal here to assess the transactonalness level of the transport nfrastructure wthn the regonal economc system, but also a prcng mechansm for specfc goods or commodtes. 4. Results and dscusson A transactonalness analyss for the regonal transport nfrastructure s made n a research of a number of ndcators accordng to fgures from consoldated data (Note 3) descrbed n methodologes. These ndcators nclude transactonalness by producton cost and/or transactonalness by market revenue calculated n the framework of transport ARCEAs (All-Russan Classfcaton of Economc Actvtes): (60) for the land transport actvty, (61) for the water transport actvty, (62) for the ar and space transport actvty and (63) for the support servce and extra transport actvty. Calculatons for the transactonalness ndex for the all-russan transport nfrastructure and the transactonalness ndex by types of transportaton for are gven n Table 1. Transactonalness I TI, ncludng: II (60) ARCEAs I

14 Transactonalness II (61) ARCEAs (62) ARCEAs (63) ARCEAs I II I II I II Russa I II Table 1. Transactonalness n transport nfrastructure (TI) as a whole and by actvtes n Russa for (I by market revenue / II producton cost) Note. Calculated by the authors based on the baselne data provded by Interfax news agency on the SPARK Database. Estmated data are gven n the collected book: Kuzmn, E.A., Dubrovsky, V.Zh. and Yaroshevch, N.Y., Transactonalness statstcs for Russa (July 1, 2015). Avalable at SSRN: Analysng the data from the table, one can trace a 2 ponts ncrease on the average for the transactonalness ndex n Russa n general (see detals Appendx A) and transportaton n 2013 compared to Therefore, transactonalness calculated n large for the transport nfrastructure s as follows. Transactonalness by producton cost ncreased by 2.2 percentage ponts, whle transactonalness by revenue ncreased by 2 pp. Ths s slghtly hgher than a growth trend for the mentoned ndcators as a whole by all lnes of busness (n 2013 aganst 2005, there was an ncrease by 1.3 percentage ponts and 1.2 percentage ponts respectvely) across Russa. Ths dscrepancy s assocated wth a hgher share of transacton costs n costs of transportaton provders due to specfcty of assets and actvtes to provde servces as such. At the same tme, we should pay attenton to the sgnfcant ncrease n a number of enterprses nvolved n the transport nfrastructure. It was almost trpled,.e. from 32,578 n 2005 to 93,644 n We should also menton a sgnfcant dfference n an absolute value of transacton costs ncurred by sub-sectors wthn the transport nfrastructure. Transacton costs of the land transport ncreased by 167% n 2013 compared to The same value for other knds of transportaton was as follows. The water transport had 118.4%, the ar transport had 339% and support servce and extra vehcles had 146%. Such a growth n an absolute value of transacton costs mght relate to several trends. Frst, there s an actve growth n transportaton scopes of works (e.g. the ar traffc n the same perod ncreased by 280%). Second, there were fewer stmul to mnmze and mprove the performance of transportaton provders. Next, let us analyse transactonalness n the transport nfrastructure broken down by federal dstrcts, see Table 2.

15 Regon Russa Central FD Southern FD Northwest FD Ural FD Sberan FD Far East FD Prvolzhsky FD North-Caucasan FD Table 2. Transactonalness by revenue n regonal transport nfrastructures broken down by federal dstrcts (FD) n , unts Note. Calculated by the authors based on the baselne data provded by Interfax news agency on the SPARK Database. Estmated data are gven n the collected book: Kuzmn, E.A., Dubrovsky, V.Zh. and Yaroshevch, N.Y., Transactonalness statstcs for Russa (July 1, 2015). Avalable at SSRN: The hghest values for transactonalness of the transport nfrastructure are observed n the North-West and Sberan Federal Dstrcts, a devaton from the Russan average value s about 20%. The rest federal dstrcts manly comply wth the all- Russan transactonalness ndex. Revewng the transactonalness ndex dynamcs by ndustres one can menton ts ncrease by 1 pp. on the average. At the same tme, the UFD does not follow ths trend. If n 2005, the transactonalness value for the UFR exceeded the natonal ndex by 9 pp., then n 2013, t was as low as 10 pp. below the natonal value. Such trend can be explaned wth an ncrease n a qualty of the regonal transport nfrastructure. Broken down by regons n the Ural Federal Dstrct, there s an analyss of transactonalness presented n Table 3. Regon Russa Ural FD Sverdlovsk Regon Chelyabnsk Regon Kurgan Regon Tyumen Regon Table 3. Transactonalness by revenue n regonal transport nfrastructures broken down by regons n the Urals Federal Dstrct n , unts Note. Calculated by the authors based on the baselne data provded by Interfax news agency on the SPARK Database.

16 Estmated data are gven n the collected book: Kuzmn, E.A., Dubrovsky, V.Zh. and Yaroshevch, N.Y., Transactonalness statstcs for Russa (July 1, 2015). Avalable at SSRN: Analysng the dynamcs of changes to the transactonalness ndex by regons n the Urals Federal Dstrct, we should menton ts hgh value for the Tyumen Regon. Thus, a dfference between the transactonalness ndces for the transport nfrastructure between the Tyumen Regon and the Chelyabnsk Regon s 9.5 pp. However, t should be also sad that n , there was a 54% decrease n the transactonalness ndex for the Tyumen Regon, whch says of a less number of traffc lmtatons. In general, the transactonalness ndex by regons of the Urals Federal Dstrct comples wth the value of the natonal ndex. At the same tme, the transactonalness ndex for the Sverdlovsk Regon s usually 20% lower than the natonal ndex, assumng relatvely much more advanced technologcal and nsttutonal envronment, n whch the transport nfrastructure of the regon exsts. It should be mentoned that today s practces to make a statc analyss to assess the transport nfrastructure development apply such ndcator as a freght rate ndex. Ths ndex s to the most extent smlar n ts calculatons to the transactonalness ndex as t uses a prce of the cargo transportaton, whch ncludes the transacton costs among the others. Ths ndex represents a co-focus of a general trend revealed n the analyss, but cannot be used to ts full extent to measure operatonal performance n the regonal nfrastructure due to a number of dsadvantages. Frst, t only represents the dynamcs of a prce growth related to cargo transportaton,.e. a supply/demand rato. At the same tme, a low level of nfrastructure development assumes lmts to the supply and the demand, respectvely. Second, t does not represent a qualtatve and quanttatve complance of the transport nfrastructure wth the potental demand from commercal agents n the market. Thus, a hgher level of regonal nfrastructure development represents a relatvely low value of the growth dynamcs for the freght rate ndex. The general dynamcs of the rate ndex across the Sverdlovsk Regon wth respect to Russa as a whole was less than an exponent of 5.5% n 2013 and Thus, the proposed transactonalness ndex s much accurate, at least from the pont of vew that t makes the results of the regonal transport nfrastructure much completed and accurate. The transactonalness analyss for regon-wse and Russan natonal transport nfrastructure has not dsclosed ts factor component, only beng a statc descrptor of an envronment. There mght be the followng determnants for the transactonalness ndex dynamcs n the transport nfrastructure: a) A level of an economc growth (recesson) has an mpact on a value of transactonalness. Under crcumstances of an economc crss, a demand for transport nfrastructure servces wll declne; companes wll mnmze ther costs, decreasng the ndex value, on the one hand. On the other hand, a crss mght encourage agents to search for new economcal relatonshps and ncrease a level of transacton costs.

17 b) Geographc and economcal poston of a regon. Its long mleage, dffcult clmatc condtons, on the one hand, and specfcs n placement of major productve forces mght ncrease or decrease a value of the ndex. c) A level of technologcal development n the transport and logstcal complex of a regon. Use of modern technologes n transportaton, a sutable number of avalable mult-transportaton hubs wth an approprate qualty that meet the specfcs of economc development n a regon are factors that decrease the transactonalness ndex. At the same tme, retoolng generates new or makes prevously avalable nsttutonal relatonshps wthn the envronment much elaborated, whch n turn ncreases a value of the ndex. d) A level of competton n transport sectors. An establshment of a large number of transportaton provders generates avalable artfcal barrers at an entrance to the sector, whle ther overcomng requres other transacton costs as well as, to the equal extent, the ncreased concentraton n the ndustry. e) An nvolvement of natonal government n ownershp, management and control over the transport nfrastructure. An ncreased government partcpaton n relatons wth commercal partes n nfrastructure sectors and an ncreasng number of admnstratve procedures cause a correspondng growth n transactonalness of the transport nfrastructure. f) A level of management effcency and a qualty of made decsons. A development of control systems, a use of marketng and logcal control mechansms n actvtes of a transportaton provder result n both reduced transacton costs, and ther growth at the same tme. It should be mentoned here that an mpact of factors has a compensatng acton, e.g. strcter measures of government control mght compensate for an ncreased competton. It s almost mpossble to evaluate such acton. Herewth, we mght apply the transactonalness ndex as a statc value that says of envronment vscosty wth certan thresholds. Thus, the transactonalness ndex let us descrbe the busness envronment. For the purposes of dscusson, we can defne ths ndex as densty of transacton costs that depend on a development level and performance of the transport nfrastructure n a regon. 5. Concluson The research has touched pressng ssues n methodology of performance as an overall economc category drawng on the example of evaluated operatng results for companes wthn the transport nfrastructure. Meetng the goal set n the paper and crtcally summarzng tradtonal approaches, the authors assume a crucal role of transacton costs to determne a qualty of the envronment. Conclusons from the revew of lterature only go to confrm ths. The case of the transport nfrastructure s representatve here, mostly n a search for opportuntes to perform the fundamental system functon,.e. provdng enttes wth necessary condtons for an effcent economc exchange. It becomes obvous that the known methods and concept are unable to resolve such a task. The authors attempt to solve the academc problem of a search for a cross functonal crteron to assess a qualty and a level of envronment development, has emboded

18 n the transactonalness ndex ntroduced for scentfc use. Its meanng mostly comes down to several mportant trgger ponts, whch have been determned. The man characterstc of transactonalness, on the one hand, s complexty of economcal communcaton wth a wder content mplyng mplemented exchange processes. On the other hand, transactonalness s a condton of the nsttutonal envronment, therefore able to show relevant effects of uncertanty and rsks. An analyss of ts values dynamcs can result n qute an objectve estmate of changes to such a phenomenon for nstance as a state of development n the regonal transport nfrastructure, consdered n ths paper as a research object to get an emprcal evdence. Moreover, ts regon-wse natonal comparatve analyss let us reveal weaknesses. Scentfc consstency of assumptons made by the authors has been supported wth the results from the approach ploted n the research on Russan companes n transport nfrastructure n a regon-wse revew for It should be added here that the research of essental characterstcs of the transacton costs has allowed makng a number of mportant methodologcal conclusons. Frst, the transacton costs are made by an array of contractors and nclude both the costs to mantane a drect communcaton and a feedback between contractors, and the costs for formalzaton,.e. for makng a memory of these nteractons. Secondly, there s ther objectve dfferentaton nto those of the natural type and the background type. Developng ther arguments, the authors have concluded that there are transacton costs n place, whch are standard n a manner of speakng. All ths serves as a startng pont for the future and more detaled theoretcal research on the transacton costs. The approach proposed by the authors has some lmtatons n ts applcatons. The transactonalness analyss for the transport nfrastructure across regons and Russa as a whole does not dsclose ts component factor and s a statc (torque) characterstc of the envronment n tme. There mght be more factors determnng the transactonalness dynamcs for the transport nfrastructure (e.g., level of technologcal development, government nvolvement, management qualty. etc), but ther sgnfcance s uncertan to the maxmum extent. Herewth, n ther combned mpact, a number of factors s able to sett off the effect of each other. To smooth these contradctons, the authors focus s the fact that the transactonalness ndex s cross functonal. Acknowledgments Ths paper was prepared under research project No Improvng government polcy to develop competton n nfrastructure sectors of economy wth a natural monopoly component accordng to a basc part of government commsson gven by the Mnstry of Educaton and Scence of the Russan Federaton n a feld of research No. 2014/238. Notes Note 1. Concepts of underlyng or natural level of transacton costs were ntroduced to descrbe wth much comprehensveness propertes of the

19 transactonalness phenomenon. However, n case readers are nterested n ths aspect, frst, known lmtatons to ths paper do not allow an extended defnton for the content of both underlyng and natural levels of transacton costs. Secondly, f these concepts seemngly really deserve some attenton, you are advsed to refer to the authors' paper, contanng statement that s more detaled and a soluton for such an academc challenge. Note 2. The authors only perceve a typology or classfcaton of transacton costs n terms of theoretcal systematzaton, whereas classfcatons known n practce (e.g. see Mlgrom & Robert, 1992; Eggertsson, 1990; etc.) due to complexty n accurate measurng for each type of transacton costs, make t dffcult to make an evaluaton model to defne a level, at whch condtons favour busness. At the same tme, a detaled and accurate calculaton of an amount of costs s only necessary n case of an analyss of ther structure, a development of a target manageral decson. Note 3. Estmates wthn the research were based on data from Interfax news agency. References Arkhereev, S.I. (2000). Transacton costs and nequaltes n condtons of market transformaton. Moscow: Busness Inform. Arrow, K. (1969). The organzaton of economc actvty: ssues pertnent to the choce of market versus non-market allocaton. The Analyss and Evaluaton of Publc Expendture: The PPB System, 1, Auzan, A. (Ed.). (2006). Insttutonal economcs: New nsttutonal economcs: course book. Moscow: INFRA-M, p. 51 Balsevch, A.A., Yudkevch, M.M., & Podkolzna, E.A. (2009). Transacton costs. Part 3: Prorty natonal projects. Educaton. Moscow: GU VSHE Publshng House. Burkov, A.L. (1999). Transacton costs as a crteron of performance n reforms of ownshp relatonshps: academc papers. IE UB RAS. Davdson, P. (2002). Fnancal markets, money, and the real world. Edward Elgar Publshng, 208. do: / Demchuk, A. (2002). Portfolo optmzaton wth concave transacton costs. FAME Research Paper Seres from Internatonal Centre for Fnancal Asset Management and Engneerng: Research Paper, 103, 38. do: /ssrn Eggertsson, T. (1990). Economc behavour and nsttutons. Cambrdge Unversty Press. Gabrel, S.A., Mattey, J.P., & Wascher, W.L. (2013). Compensatng dfferentals and evoluton n the qualty-of-lfe among US states. Regonal Scence and Urban Economcs, 33, Harrs L. (2003). Tradng and exchanges: market mcrostructure for practtoners. Oxford Unversty Press.

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23 Appendx A Fgure A1. Transactonalness by revenue of Russan regons for 2013, unts x 100 (equflled matchng) Note. Calculated by the authors based on the baselne data provded by Interfax news agency on the SPARK Database. Estmated data are gven n the collected book: Kuzmn, E.A., Dubrovsky, V.Zh. and Yaroshevch, N.Y., Transactonalness statstcs for Russa (July 1, 2015). Avalable at SSRN: