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Institutions, Networks and Entrepreneurship Development in Russia: An Exploration

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  • Aidis, Ruta

    (University College London)

  • Estrin, Saul

    (London School of Economics)

Abstract

In this paper we explore the ways in which institutions and networks influence entrepreneurial development in Russia. By utilizing new Global Entrepreneurship Monitor (GEM) data collected in 2001, we investigate the effects of the weak institutional environment in Russia in terms of three dimensions: on the rate of productive entrepreneurial activity measured in terms of start-ups and existing business owners; on the characteristics of business owners; and on business financing. In addition, the analysis explores the effectiveness of Russia’s informal networks for circumventing the weak institutional environment for business development. Our results indicate that Russia’s business owners share many of the same characteristics as business owners in advanced western countries, though education is not associated with entrepreneurial activity. However, the main differences are in the sources of financing and the fact that relatively few individuals engage in productive entrepreneurial activity. Our results support the notion of the limited effectiveness of Russia’s networks for supporting entrepreneurial activity in its weak institutional environment.

Suggested Citation

  • Aidis, Ruta & Estrin, Saul, 2006. "Institutions, Networks and Entrepreneurship Development in Russia: An Exploration," IZA Discussion Papers 2161, Institute of Labor Economics (IZA).
    • Handle: RePEc:iza:izadps:dp2161
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    Cited by:

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    2. Aidis, Ruta & Adachi, Yuko, 2007. "Russia: Firm entry and survival barriers," Economic Systems, Elsevier, vol. 31(4), pages 391-411, December.
    3. Ruta Aidis, 2023. "Do institutions matter for entrepreneurial development?," IZA World of Labor, Institute of Labor Economics (IZA), pages 334-334, August.
    4. Randolph Luca Bruno & Maria Bytchkova & Saul Estrin, 2013. "Institutional Determinants of New Firm Entry in Russia: A Cross-Regional Analysis," The Review of Economics and Statistics, MIT Press, vol. 95(5), pages 1740-1749, December.
    5. Ivan M. Manev & Tatiana S. Manolova, 2010. "Entrepreneurship In Transitional Economies: Review And Integration Of Two Decades Of Research," Journal of Developmental Entrepreneurship (JDE), World Scientific Publishing Co. Pte. Ltd., vol. 15(01), pages 69-99.
    6. Bhat, Shabir A & Khan, Riyaz A, 2014. "Government Policy Ecosystem for Entrepreneurship Development in MSEs Sector," MPRA Paper 54540, University Library of Munich, Germany.
    7. Mario Holzner & Florin Peci, 2011. "The Impact of Customs Procedures on Business Performance: Evidence from Kosovo," wiiw Working Papers 76, The Vienna Institute for International Economic Studies, wiiw.
    8. Ahmadov, Ingilab & Mammadov, Jeyhun & Aslanli, Kenan, 2013. "Assessment of Institutional Quality in Resource-Rich Caspian Basin Countries," MPRA Paper 47430, University Library of Munich, Germany.
    9. Jiří Schwarz, 2012. "Impact of institutions on cross-border price dispersion," Review of World Economics (Weltwirtschaftliches Archiv), Springer;Institut für Weltwirtschaft (Kiel Institute for the World Economy), vol. 148(4), pages 617-645, December.
    10. Tatiana S. Manolova & Rangamohan V. Eunni & Bojidar S. Gyoshev, 2008. "Institutional Environments for Entrepreneurship: Evidence from Emerging Economies in Eastern Europe," Entrepreneurship Theory and Practice, , vol. 32(1), pages 203-218, January.
    11. Anita, Mendiratta & Shveta, Singh & Yadav Surendra, S. & Arvind, Mahajan, 2023. "When do ESG controversies reduce firm value in India?," Global Finance Journal, Elsevier, vol. 55(C).
    12. Ramanujam Nandini & Caivano Nicholas, 2016. "The BRIC Nations and the Anatomy of Economic Development: The Core Tenets of Rule of Law," The Law and Development Review, De Gruyter, vol. 9(2), pages 269-320, December.
    13. Besnik A. Krasniqi, 2007. "Barriers To Entrepreneurship And Sme Growth In Transition: The Case Of Kosova," Journal of Developmental Entrepreneurship (JDE), World Scientific Publishing Co. Pte. Ltd., vol. 12(01), pages 71-94.
    14. Barinova, Vera (Баринова, Вера) & Zemtsov, Stepan (Земцов, Степан) & Tsareva, Yulia (Царева, Юлия), 2018. "Review of Empirical Studies of Factors of Entrepreneurial Activity [Обзор Эмпирических Исследований Факторов Предпринимательской Активности]," Working Papers 031830, Russian Presidential Academy of National Economy and Public Administration.
    15. Rangamohan V. Eunni & Tatiana S. Manolova, 2012. "Are The Bric Economies Entrepreneur-Friendly? An Institutional Perspective," Journal of Enterprising Culture (JEC), World Scientific Publishing Co. Pte. Ltd., vol. 20(02), pages 171-202.
    16. Niranjan Chipalkatti & Jonathan P. Doh & Meenakshi Rishi, 2011. "Institutional quality, knowledge spillovers and entrepreneurship," International Journal of Economic Policy in Emerging Economies, Inderscience Enterprises Ltd, vol. 4(4), pages 307-329.
    17. Mrkajic, Boris, 2017. "Business incubation models and institutionally void environments," Technovation, Elsevier, vol. 68(C), pages 44-55.
    18. Ruta Aidis & Yuko Adachi, 2006. "Russia: firm entry and survival," UCL SSEES Economics and Business working paper series 67, UCL School of Slavonic and East European Studies (SSEES).
    19. Estrin, Saul & Prevezer, Martha, 2010. "A survey on institutions and new firm entry: How and why do entry rates differ in emerging markets?," Economic Systems, Elsevier, vol. 34(3), pages 289-308, September.
    20. Saul Estrin & Martha Prevezer, 2010. "The Role of Informal Institutions in Corporate Governance: Brazil, Russia, India and China Compared," Working Papers 31, Queen Mary, University of London, School of Business and Management, Centre for Globalisation Research.

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    More about this item

    Keywords

    entrepreneurship; institutions; networks; Russia;
    All these keywords.

    JEL classification:

    • J23 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Labor Demand
    • M13 - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics - - Business Administration - - - New Firms; Startups

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