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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.

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Bibliographic Info

Paper provided by Institute for the Study of Labor (IZA) in its series IZA Discussion Papers with number 2161.

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Length: 26 pages
Date of creation: Jun 2006
Date of revision:
Publication status: published in: Journal of Business Venturing, 2008, 23 (6), 656-672
Handle: RePEc:iza:izadps:dp2161

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Keywords: entrepreneurship; institutions; networks; Russia;

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Citations

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Cited by:
  1. 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.
  2. Mario Holzner & Florin Peci, 2012. "The impact of customs procedures on business performance: evidence from Kosovo," wiiw Balkan Observatory Working Papers, The Vienna Institute for International Economic Studies, wiiw 97, The Vienna Institute for International Economic Studies, wiiw.
  3. 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.
  4. Bhat, Shabir A & Khan, Riyaz A, 2014. "Government Policy Ecosystem for Entrepreneurship Development in MSEs Sector," MPRA Paper 54540, University Library of Munich, Germany.
  5. 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.
  6. Jiøí Schwarz, 2011. "Impact of Institutions on Cross-Border Price Dispersion," Working Papers IES, Charles University Prague, Faculty of Social Sciences, Institute of Economic Studies 2011/30, Charles University Prague, Faculty of Social Sciences, Institute of Economic Studies, revised Sep 2011.
  7. 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, Elsevier, vol. 34(3), pages 289-308, September.
  8. 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, Inderscience Enterprises Ltd, vol. 4(4), pages 307-329.

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