Almira Yusupova

Novosibirsk, Russia – Novosibirsk State University, Institute of Economics and Industrial

Engineering Russian Science Academy

Elements of Financial Markets’ Infrastructure Development in

Russia: Empirical Research
Abstract
Paper deals with elements of financial markets’ infrastructure. Several areas were
chosen for analysis. They are: lease services, business valuation and appraisal, unit
investment trusts, banking. Each case is studies as a separate industrial market. Special
methodology of market structure analysis is suggested and applied under research.
Selected examples don’t pretend to present the complete picture of Russian financial
markets’ infrastructure. They represent different types of such infrastructure elements.
The effectiveness and general state of infrastructure are influenced by them. The results
show that controversial tendencies could be observed in Russian economy.
Key words: market structure; market concentration; market power; sustainability
and stability of leadership; leasing; business valuation and appraisal; unit investment
trusts; banking services; financial markets’ infrastructure;
JEL classification codes: G20, D40, G30

Introduction
Financial markets couldn’t develop without basic elements which are essential for
the economy of developed countries (Brealy, Myers, Marcus, 2004). The complicated
system of financial markets’ infrastructure is formed from these elements. They didn’t
exist in administrative type soviet economy in Russia and appeared only during
transition period. Very interesting processes of financial markets’ infrastructure
development could be observed in Russian economy. Several empirical examples are
discussed in the paper. Effective banking services, developed system of investment
trusts, mechanisms of companies’ valuation and appraisal, financial lease schemes are
connected tightly with financial markets’ infrastructure. These particular segments were
studied under our research. We don’t pretend that they are crucial or most important.
They are very different but each of them characterizes the level of financial markets’
infrastructure. It seems interesting to compare these segments.

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 Each example is understood and analyzed as a separate industrial market. Our initial
hypothesis is related to the competitive structure of these markets. High level of
competition could be explained as a positive tendency which leads to the effective
financial markets’ functioning. If these markets are far form being competitive, if they
are ruled administratively than it is important to analyze the position of market leaders,
to see the sources of market power. Empirical data on Russian industrial markets were
used. Lease market characteristics are analyzed in a more detailed way. The principles
and methods of industrial economics are applied under research and a special method of
leadership analysis is suggested.

Research Methodology
The processes of real industrial markets emergence occur in Russian economy. In
some cases real Russian markets confirm economic theory, but very often they
demonstrate controversial characteristics. Anyway there are enough data necessary for
the research of real Russian industrial markets.
It is necessary to pay attention to the industrial market as an economic category
which is very important for economic analysis. Industrial market structures, cooperation
of its participants, dependence or independence of their behavior, dominance of definite
firms determine the character and profitability of firms operation (Scherer, Ross, 1991).
According to the old Russian economic approach the enterprise considered to be the
main economic agent. Certainly it is extremely important to study each enterprise, but
now under the development of integration processes, existence of many complex
contracting procedures the decisions of the firm are determined greatly by industrial
market type and structure. Some researchers consider now that industry and industrial
market are the main parts of the whole economic system. They should be studied and
analyzed.
The broad descriptive model of the relations mentioned above was conceived by
Edward Mason and developed by Joe Bain. It is called The Structure – Conduct –
Performance Paradigm (Scherer, Ross, 1991). The idea of research methodology is
based on this approach. According to the paradigm performance in particular industries
or markets is said to depend on the conduct of sellers and buyers in many matters.
Conduct in turn depends on the structure of the relevant market, characterized by the
number and size of distribution of sellers and buyers, the degree of products

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differentiation, the presence or absence of barriers to the entry of new firms, the shapes
of costs curves, the degree to which firms are vertically integrated and the extent of
firms’ product line diversification. Market structure is in turn affected by a number of
basic conditions (both from supply and demand side). This basic paradigm l provides
the basic framework for the research of real Russian markets’ structure.
There are several basic indicators of any industrial market structure. Level of
economic activity of large enterprises and level of dominance (market power) of one or
several firms are among such indicators (Jamison). Concentration is one of the main
characteristics of market structure, it shows the number of firms on the market and it
reflects how much they differ form each other. Concentration is related to the level of
competition, to the market power of selected firms. It is well known from economic
theory that level of concentration should be rather low for competitive markets
(Morgan, 2007). However real Russian markets don’t always fit theoretical models.
Real Russian markets provide basis for very interesting interpretations from the
point of view of Industrial and Institution Economics. Real data show that in general
competition on the Russian markets increased during last 15 years. At the same time
competition led to the companies’ consolidation and concentration increase (Perloff,
Carlton, 2004). Current market structure and market structure in general is related to the
activities of few large companies. Leading position provides market power for a
company. It is important to determine whether there are such market leaders and of so –
how stable is their leading position (Bay).
We suggest an approach to the research of leading position. Under this approach
we analyze “sustainability” and “stability” of leading position and therefore market
power on the industrial market. The list of leading firms could be created basing on
different criteria. It is possible to form a group of top (10, 20 etc) firms – leaders on
sales, a group of leaders according to the level of profit, cost of assets, value added etc.
Many groups of leaders could be created on each market. These groups may include the
same or different firms According to our definition “sustainability” of leading position
of the company means that this company is included to the group of leaders more than
one time, i.e. is included in more than one group. If leading position is sustainable it is
based on various criteria. If leadership is unsustainable groups of leaders are very
different, if leadership is sustainable they are similar.
“Stability” of firm’s leading position in our approach means that it remains in the
group of tops during several (more than one) years, it reflects long term leadership.

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Summing up definitions described above we could formulate that leading position of the
firm is sustainable and stable if this position is based on various criteria in long term
period. If such leadership could be observed at the market it would be possible to make
forecasts on this market development tendency.
The scheme of analysis is showed on the figure 1 below.

Leadership Firms’ Sets of leaders

characteristics: behavior formed according
Sustainability; indicators to selected
Stability indicators

+ - Non sustainable;
Sustainability; Sets’ Non stable
Stability intersectio leadership
of Leadership n

Fig. 1 Leadership analysis scheme

Four industrial markets were analyzed using this methodology. They are: lease
services market, business valuation and appraisal market, unit investment trusts market
and banking services market. The results are presented below.

Lease market
Developed financial markets are related to variety of investment alternatives. Lease
finance is one of them.
The level of leasing development in Russia is considered to be insufficient, though
this market is extremely dynamic.
Below come some basic characteristics of current lease market in Russia (Raexpert,
2004, 2005):
- Annual rate of growth is very high within national lease market during last
four years. In 2003 the volume of lease finance increased in two times. The
figures of later years (2004-2006) are not so impressive but remain very high.
We consider that this fact reflects institutional environment development from
one side and changes in firms’ (leasers and lessees) performance from the
other.

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 - Competitive environment is developing within lease market. Leasing firms
start to compete with each other. In previous years (till 2003) potential lessees
had to choose between leasing and other forms of assets acquisition (usually
credit, so decision making process meant the choice between lease and hire-
purchase). In year 2003 potential lessees started to compare suggestions of
different leasing firms. Real competition among leasing firms is appearing.
This is the year of real lease market emergence in Russia. Leasing firms now
compete through prices, lease terms, privileges etc. According to our forecast
this tendency will develop further.
- In is interesting to point out that along with low barriers to entry lease market
could be characterized with the relatively high level concentration.
We’ve analyzed concentration indicators using empirical data provided by Expert
Ru agency (Raexpert, 2004,2005). Following indicators of leasing firms’ behavior were
used in the framework of analysis.
1) – volume of lease firms’ payments to assets providers; This indicator reflects the
general lease market level.
2) – number of and cost of finished transactions (lease contracts, that were started
and finished successfully during last two years, this factor indicates retrospective
aspect, the history of leasing firm);
3) – number and cost of current transactions (contracts that are not finished yet);
This index indicates firm’s current position and behavior.
4) – amount of payments received by leasing firm (this reflects financial aspect, the
effectiveness of financial scheme);
It is possible to point out that lease market is high concentrated.
Diagrams on figures 2-4 show the changes in concentration ratios CRn (where
n=4,6,8,10,20). Data show that the level of concentration decreased in 2003 compared
with 2002. Data for 2001 are taken into account on figure 2, the concentration
calculated basing on payments to providers is showed here. Coefficients CR4, CR5,
CR8 and CR10 increased in 2002 . This could be interpreted as market unevenness and
market power of leaders strengthening. At the same time Cr20 coefficient decreased.
This indicates that positions of non-leading firms became close. Later in 2003 level of
concentration decreased significantly.

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 100

80

2001
60
2002
40 2003
2004
20

0
CR4 CR6 CR8 CR10 CR20

Fig. 2 Concentration ratios calculated basing on the level of payments to providers.

100
80
60 2002
40 2003
20
0
CR4 CR6 CR8 CR10 CR20

Fig. 3 Concentration ratios calculated basing on value of finished transactions

The share of four leaders didn’t change while dominance of other leaders decreased.
This indicates the signs of competitive structure.

100
90
80
70
60 2002
50 2003
40 2004
30
20
10
0
CR4 CR6 CR8 CR10 CR20

Fig. 4 Concentration ratios calculated basing on value of current transactions

Current transactions reflect current situation, the level of concentration here
decreased steadily.

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 We’ve estimated Herfindalph-Hirshman Index (HHI) for lease market. It turned to
be not high. HHI for current transactions in 2004 was 581, 56. Such level is typical for
non-concentrated markets. V.Gazman in his research came to the similar conclusion
(Gazman, 2003).
Lease market demonstrates very interesting combination of competitive (HHI level)
and non-competitive (CRn values) structures. Market leaders could be clearly identified.
The analysis of their behavior, identification of privileges sources are very important for
market description. If there are stable and sustainable leaders it could be possible to
predict market tendencies. Character of leadership and features of market power are
studied below.
Leading position could be characterized by the difference between the leader and
other firms. It shows how big the gap between leading and average firms is. Such data
are presented in table 1 below. Data from www.raexpert.ru were used. The results show
the areas where leading positions are stronger. We consider that they are related to the
sources of market power.
Table 1
Difference between leaders and average level, %
Indicator 2002 2003 2004
Δ1 Δ2 Δ1 Δ2 Δ1
Payments to providers 20,35 12,41 13,88 13,88 10,58
Value of finished transactions 37,89 9,22 55,85 55,85 -
Value of current transactions 47,37 16,51 17,29 17,29 9,66
Payments received - - - - 17,74
Δ1 shows the difference between firm which has maximum meaning of the selected
indicator and average. Δ2 is determined similarly but it shows difference between
average firm and firm which is general national leader (i.e. has the best integral rating).
Δ2 could be negative. This means that position of national leader is worse than average
according to selected indicator. The probability of such situation is very low.
If Δ1 and Δ2 are very close the leadership is sustainable. It is interesting to point out
that in 2002 the difference between all Δ1-s and Δ2-s was significant. In 2003 they
became very close.
The general smoothing processes could be observed. At the same time positions of
leaders are very distinguished.

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 Using suggested methodology of analysis which was mentioned earlier we studied
market leaders. Following indicators were taken into account under this part of research
:
- value of payments;
- value of payments paid to providers;
- value of current transactions;
- value of transactions with different financial instruments;
- value of equity;
- value of regional current transactions;
- value of current transaction with different assets;
The analysis showed that leading position could be characterized by growing
stability and sustainability.
Bank and commercial credits and bills were studied among financial instruments. It
turned out that market leaders use mainly bank credits. This reflects the general
weakness of financial markets’ infrastructure.
Equity level analysis showed that it is necessary to have large amount of equity in
order to take very high market position. However average firms could operate
effectively without significant equity.
Our results illustrate that positions of national leaders are sustainable in regions. At
the same time a couple of regional leaders could be identified in each region.
Another result reveals that market power is applied only for limited set of assets.
Some results are presented in table 2.
Table 2
Characteristics of sustainability of leading positions on lease market
(2005 data)
Criteria of leaders’ sets formation Number of firms in General number of selected
each group firms / possible maximum
number of firms
- value of payments received;, 10 13 / 30
- value of payments to providers;
- value of current transactions;
-value of transactions with bank credits 15 31/45
- value of transaction with commercial
credits
- value of transactions with bills;
- value of regional transactions (9 regions 10 48/90
studied);
- value of transactions with definite assets 10 59/160
(16 types of assets);

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 These data confirm our conclusion that there sustainable market leaders from one
side and competitive tendencies from the other. The second characteristic is especially
relevant for regional markets and for transactions with definite assets.
Next step of analysis deals with the level of individual firm. Data on 99 companies
in 2003 and 87 companies in 2004 were used for regression analysis. Each year was
analyzed separately. The results are described below. Following variables were used for
2003 data analysis:
- value of payments paid to providers (Y); This factor is very important for lease
business organization. It has great influence to the position of the firm. This variable
was chosen as dependent in the framework of our analysis. The main aim was to explain
what factors determine the meaning of this variable, i.e. what factors form sources of
market power.
The independent variables included:
- firm’s location (z1); Lease market is very heterogeneous from territorial point of view.
Most firms are located in central area. We wanted to see how important for firms
position the distance from Moscow is.
- years of market experience (z2); This variable shows how long the firm operates on
the market. According to our initial hypothesis this indicator should be very important
as experience reflects the level of trust, firm’s reputation, which is crucial for providers.
- the value of received payments (z3);
- value of payments paid to providers in previous year (z4); We tried to see how
important is the link with previous position.
- average value of one finished transaction (z5);
- average value of one current transaction (z6);
- additional services rendered by providers (% of transaction value) they included:
warrants (z7), discounts and benefits (z8), maintenance and repairing (z9) and
commercial credit (z10).
The results are presented in tables 3 and 4.
Table 3
Regression Statistics for 2003 (initial variant)
Regression statistics
Multiple R 0,877630308
R-squared 0,770234958
Normalized R- squared 0,744125294
Standard deviation 15258,2502

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 Observations 99

Table 4
General Regression Characteristics for 2003 (initial variant)
Standard
Coefficients deviation t-statistics P-Meaning
Y-intersection 9422,026644 3769,405224 2,499605663 0,0143
Variable Z 1 -0,677736266 0,84529416 -0,80177564 0,4248
Variable Z 2 -1201,259138 850,942547 -1,411680662 0,1616
Variable Z 3 -0,758223984 0,256651932 -2,954289016 0,0040
Variable Z4 1,208981531 0,156735726 7,713503232 0,0000
Variable Z 5 5,569683058 8,238349483 0,67606783 0,5008
Variable Z 6 0,238289833 0,070083618 3,40007893 0,0010
Variable Z7 -0,67897117 2,244983093 -0,302439324 0,7630
Variable Z8 -1,143289085 1,279674127 -0,893422052 0,3741
Variable Z9 1,453673824 1,279051401 1,136524946 0,2588
Variable Z10 0,059527985 0,043776193 0,9652

Only three variables turned to be significant. They are: value of payments to

providers in the past, value of payments received and average value of current
transaction.
It is interesting to note that payments received coefficient is negative. Additional
services turned to be insignificant. This could be explained by the fact that Russian
lease market is undeveloped. In developed market additional providers’ services
determine leasing firm’s possibilities.
We formed modifies variant also. Here we didn’t divide services to elements but
counted them all together (z7.1=z7+z8+z9+z10). The results are showed in tables 5 and
6.
Table 5
Regression Statistics for 2003 (modified variant)
Regression statistics
Multiple R 0,875884851
R-squared 0,767174272
Normalized R- squared 0,7492646
Standard deviation 15104,24008
Observations 99

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 Table 6
General Regression Characteristics for 2003 (modified variant)
Standard
Coefficients deviation t-statistics P-Meaning
Y-intersection 9272,425914 3710,468566 2,498990559 0,0142
Variable Z 1 -0,695643058 0,831500122 -0,836612093 0,4050
Variable Z 2 -1041,492696 807,7861434 -1,289317358 0,2006
Variable Z 3 -0,742207189 0,251416125 -2,952106542 0,0040
Variable Z4 1,204521349 0,154389107 7,801854499 0,0000
Variable Z 5 4,486446009 7,375665349 0,608276785 0,5445
Variable Z 6 0,235826834 0,06931471 3,40226241 0,0010
Variable Z7 0,157249924 0,053996131 2,912244282 0,0045

Additional services turned to be significant here. It should be pointed out that

location doesn’t have great influence.
Data for 2004 were analyzed similarly.
The value of payments to providers was also recognized as dependent one here (Y).
Regressors look as follows:
- average level of current transaction (z1);
- value of payments received.(z2);
- structure of authorized capital stock % - share of government (z3), share of banks
(z4), share of producers and providers (z5); We suggested that the strategy is
determined by dominating owners
- location – distance from Moscow(z6);
Results are presented in tables 7 and 8.
Table 7
Regression Statistics for 2004
Regression statistics
Multiple R 0,935094045
R-squared 0,874400873
Normalized R- squared 0,864980938
Standard deviation 14134,65954
Observations 87

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 Table 8
. General Regression Characteristics for 2004
Standard
Coefficients deviation t-statistics P-Meaning
Y-intersection 1831,090599 2319,599465 0,789399475 0,43221
Variable Z 1 0,346891415 0,024140549 14,36965699 0,00000
Variable Z 2 -0,456720213 0,091934896 -4,967865651 0,00000
Variable Z 3 32,64631258 72,47819573 0,450429433 0,65362
Variable Z4 77,7563628 43,72524559 1,778294478 0,07915
Variable Z 5 17,50643006 74,15597017 0,236075801 0,81398
Variable Z 6 4124,349485 3223,440954 1,279486593 0,20442
Variable Z7
Only two variables turned to be significant – value of current transaction and
payment received.
Summing up empirical analysis results it is possible to suggest following
conclusions:
™ Market structure is determined by the limited number of leading firms; at the
same time competition is emerging; there two competitive segments: one
reflects growing competition among leading firms, another deals with non-
leading group;
™ Firm’s position on lease market, its market power is determined mainly by
current operations and relations with lessees; This is indirect characteristics
of undeveloped financial mechanisms and financial markets’ infrastructure;
™ In general taking into account the dynamics and competitive direction of
lease market development it is possible to predict positive development of
this market; It would play important role in improvement of investment
system and financial markets’ infrastructure.
Other sections of the paper deal with different examples. Similar methodology was
used. Data from www.raexper.ru and www.rbc.ru were used for other cases analysis.

Market for business valuation and appraisal

The demand for assets’, companies’ valuation and appraisal is growing steadily
under market economy development, under financial markets emerging and evolution.
The structure of valuation and appraisal market reflects the financial infrastructure in
general. This market is rather young in Russia. We studied its structure basing on data
for Siberian region. The situation on it is very typical for regions.

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 There were 34 companies operating on this market in 2006. Volume of their sales
increased on 28% comparing with 2005. Concentration rations calculated for this
market are presented on the figure 5.

1
0,9
0,8
0,7
0,6
2005
0,5
2006
0,4
0,3
0,2
0,1
0
CR2 CR4 CR10 CR20

Figure 5 Concentration ratios calculated basing on general sales volume

The results show that there are distinguished leaders but their dominance decreased
in 2006.
Market concentration estimated by HHI is shown in table 9. HHI meanings were
calculated basing on different indicators.
Table 9
HHI level in 2006
Indicator HHI calculated according to the indicator
Volume of sales 1058,89
Number of employees 428,47
Earnings from activities on business valuation 3367,73
Earnings from activities on real estate valuation 1054,28
Earnings from activities on movable assets 691,11
valuation
Earnings from activities on intangible assets and 1825,63
intellectual property valuation

In general the level of concentration is moderate (first line in the table). There are
no great differences between firms in number of employees. This means that this
parameter is not connected with leading position. It is interesting to estimate
concentration on different market segments, reflecting firms’ specialization. Very high
level of concentration could be observed for business valuation segment. Market power

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is related to this type of activities. Moderate level of concentration is observed on
segment of intangible assets valuation. Companies don’t differ much on movable assets
valuation activities.
Sustainability of leadership is studied below.
Table 10
Sustainability of leadership on business valuation and appraisal market
(10 leaders were selected according to each criterion)
Criteria of leaders’ sets selection General number of selected
firms / possible maximum
number of firms

- Volume of sales 10/20

- Earnings from activities on business valuation
- Volume of sales 18/20
- Earnings from activities on real estate valuation

- Volume of sales 25/40

- Earnings from activities on real estate valuation
- Earnings from activities on movable assets valuation
- Earnings from activities on business valuation
The results show that sets of leaders formed according to criteria of general volume
of sales and earnings from activities on business valuation are almost the same.
Leadership is absolutely sustainable here. Leadership on real estate valuation is very
unsustainable.
Leadership on different segments of valuation activities (last line in the table) could
be characterized by intermediate level of sustainability.
It should be pointed out that first three leaders’ positions didn’t change during
2005-2006 years while positions of other firms were unstable.
In general it is possible to conclude that market is highly concentrated and
sustainable leaders could be defined.

Unit Investment Trusts

Different investment intuitions are related to developed financial markets. Unit
investment trusts are among them. These trusts are emerging in Russian economy.
Management companies are rather active. Unit Investment Trusts’ (UIT) market
certainly is very young, it doesn’t have a history like lease market but it also
demonstrates very interesting tendencies. UIT market structure is illustrated below.

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 100

90

80

70

60
2004 год
50 2005 год

40 2006 год

30

20

10

0
CR2 CR4 CR6 CR8

Fig 6 Concentration ratios calculated basing on the value of capital in trusted

management
Coefficients show that there are distinguished market leaders. It should be noted
that unlike previous example number of companies is much larger.
HHI concentration indicator is showed in table 11. These figures also were
calculated basing on the value of managing capital.
Table 11
HHI level for UIT market
Year HHI
2004 2233,96
2005 1976,34
2006 2367,21

Market could be characterized by high level of concentration. The specific feature

of this particular market structure is that concentration level increased in 2006. Gap
between average and leading positions is presented in table 12.
Table 12
Difference between leaders and average level, %
Indicator 2004 2005 2006

Value of capital in trusted

management 24,46 24,45 30,5

This market is the youngest among all analyzed examples. It has very clear high
concentrated structure. Positions of market leaders are very strong and their dominance
increases. Competition is not significant. In general such structure could not be valued

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positively; it doesn’t support effective functioning of financial markets. We could
suggest that the main reason deals with the early stage of market development.

Banking services market

Bank system and market for banking are the most important basic elements of
financial markets’ infrastructure. This market development started at the very initial
stages of market economy formation. Other institutes’ (including the examples analyzed
earlier) functioning is impossible without effective banks’ operation. Some empirical
data concerning banking market in general are presented below.
Table 13
Concentration on banking cervices market in Russia in 2004

Concentration indexes
Indicator – basis for
calculation CR2 CR4 CR10 CR20 HHI

Number of employees 69,64 72,31 78,21 83,47 4604,44

Value of assets 56,85 65,41 77,20 85,36 2 768,75

Value of equity 39,48 50,26 61,96 72,17 1 067,69

Profit level 54,30 60,53 70,47 81,36 1 991,02

Dominance of selected companies could be observed on this market also. The

general level of concentration measured by HHI is much higher than in other cases. HHI
calculated basing on employees number is the highest, market concentration is
extremely strong. HHI values calculated basing on the other indicators are much lower.
This reflects low efficiency of market leaders (labor productivity in particular).
There is one distinguished leader on this market Sberbank of Russia. The difference
between this giant bank and average level is showed in table 14.

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 Table 14
Difference between leader and average level, %, 2004 year
Indicator Gap, %
Number of employees 66,61
Value of assets 50,66
Value of equity 28,14
Profit level 40,76

If Sberbank data are excluded from analysis the structure is changed significantly.
In this case market structure would be close to competitive and maximum HHI would
be reached for profit level. However such assumption seems unreal because it is
Sberbank who controls the main part of the market.
Except existence of one leader which makes the structure close to monopoly there
are other strong banks which have market power. Sustainability of leadership is
illustrated below in table 15.
Table 15
Sustainability of leadership on banking services market
Criteria of leaders’ sets formation Number of firms in General number of selected
each group firms / possible maximum
number of firms
- Sales volume in 2005 10 12/20
- Sales volume in 2004
- Sales volume in 2005 10 14/30
- Sales volume in 2004
- Assets value on 1.01.2006
- Sales volume in 2005 10 13/20
- Assets value on 1.01.2006
- Sales volume in 2004 10 13/20
- Assets value on 1.01.2006
- Sales volume in 2005 10 21/40
- Sales volume in 2004
- Assets value on 1.01.2006
- Annual sales growth rate

Comparison of data for two years shows stability of leadership. Comparison of sales
and assets value indicators shows relatively high sustainability of leadership. However
leadership characteristics are changed when we take into account growth rates. These
rates influence to some extent future positions. So it is possible to predict some market
structure changes in future.
In general market is high concentrated. Its structure is determined currently by
small group of sustainable leaders with clear dominance of one bank. Such type of

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structure could not be understood as relevant to market economy requirement. At the
same time it provides possibilities for government regulation.

General conclusions
New industrial markets are developing in Russian economy. Many of them form
infrastructure of financial markets. Their tendencies, type of structure, typical models of
behavior etc. have great influence for the character and effectiveness of this
infrastructure. Our analysis showed that all markets are characterized by the existence
of distinguished leaders. However in the case of lease market these leaders’ dominance
co-exists with competitive segment emergence. This tendency could be interpreted as a
positive signal and in general promotes effective financial markets’ infrastructure
development. Other examples – Unit Investment Funds’ market and market for
business valuation and appraisal – are far from being competitive. Controversial
tendencies could be observed here. They are passing the early stage of development
now and their contribution to financial markets’ infrastructure is not clear. While the
fact of such markets existence after years of administrative economy should be
recognized positively. Banking services market which was also analyzed plays curial
role in financial markets’ infrastructure. This market appeared at the very beginning of
transition period. Our results show that is structure is characterized by dominance and
great market power of one super leader. Many changes in banking system should take
place in order to promote effective financial markets’ infrastructure.

References

™ Brealy, Myers, Marcus Fundamentals of Corporate Finance, McGraw-Hill

Companies, Inc. 2004
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Electronic copy available at: https://ssrn.com/abstract=1078814