Capacity utilization of the Kazakhstani firms and the Russian financial crisis: A panel data analysis

This paper examines the evolution of capacity utilization for Kazakhstani enterprises over a 7 year period. Three main theoretical propositions are tested through panel data regressions. The results show that the Russian financial crisis (August 1998) substantially reduced capacity utilization throughout 1999 and that only from 2000 onwards did enterprises recover from the crisis. Moreover, the Russian financial crisis led to a permanent change in enterprises' behavior, in that only after the crisis enterprises became responsive to market signals. Finally, we also find evidence of a differential impact of the Russian financial crisis for different enterprise characteristics, including ownership, size, sector and location.