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Institutional Determinants of New Firm Entry in Russia: A Cross Regional Analysis

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  • Bruno, Randolph Luca

    ()
    (University College London)

  • Bytchkova, Maria

    ()
    (London School of Economics)

  • Estrin, Saul

    ()
    (London School of Economics)

Abstract

We analyse a three-year panel data set of Russian firms spanning from 2000 to 2002 and we investigate the effect of regional institutional and economic factors on entry rates across time, industries and regions. The paper builds on a novel database and exploits inter-regional variation in a large number of institutional variables. We find entry rates in Russia are not especially low by international standards and are correlated with natural entry rates, institutions and firm size. Furthermore, industries that - for scale and technological reasons - are characterised by higher entry rates will experience lower entry within regions affected by higher business risk. In other words industries that naturally have low entry barriers are most affected by business constraints.

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Bibliographic Info

Paper provided by Institute for the Study of Labor (IZA) in its series IZA Discussion Papers with number 3724.

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Length: 27 pages
Date of creation: Sep 2008
Date of revision:
Handle: RePEc:iza:izadps:dp3724

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Keywords: business environment; Tobit model; entry rate;

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  1. Aidis, Ruta & Estrin, Saul & Mickiewicz, Tomasz, 2008. "Institutions and entrepreneurship development in Russia: A comparative perspective," Journal of Business Venturing, Elsevier, vol. 23(6), pages 656-672, November.
  2. Ciccone, Antonio & Papaioannou, Elias, 2006. "Red Tape and Delayed Entry," CEPR Discussion Papers, C.E.P.R. Discussion Papers 5996, C.E.P.R. Discussion Papers.
  3. Campos, Nauro F. & Iootty, Mariana, 2007. "Institutional barriers to firm entry and exit: Case-study evidence from the Brazilian textiles and electronics industries," Economic Systems, Elsevier, Elsevier, vol. 31(4), pages 346-363, December.
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  8. Bertrand, Marianne & Kramarz, Francis, 2002. "Does Entry Regulation Hinder Job Creation? Evidence from the French Retail Industry," IZA Discussion Papers 415, Institute for the Study of Labor (IZA).
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  13. Ruta Aidis & Saul Estrin, 2006. "Institutions, Networks and Entrepreneurship Development in Russia: An Exploration," William Davidson Institute Working Papers Series wp833, William Davidson Institute at the University of Michigan.
  14. Geroski, P. A., 1995. "What do we know about entry?," International Journal of Industrial Organization, Elsevier, Elsevier, vol. 13(4), pages 421-440, December.
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  17. Klapper, Leora & Laeven, Luc & Rajan, Raghuram, 2006. "Entry regulation as a barrier to entrepreneurship," Journal of Financial Economics, Elsevier, Elsevier, vol. 82(3), pages 591-629, December.
  18. Dennis W. Carlton, 2004. "Why Barriers to Entry are Barriers to Understanding," NBER Working Papers 10577, National Bureau of Economic Research, Inc.
  19. Aidis, Ruta & Adachi, Yuko, 2007. "Russia: Firm entry and survival barriers," Economic Systems, Elsevier, Elsevier, vol. 31(4), pages 391-411, December.
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Citations

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Cited by:
  1. 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.
  2. Joanna Tyrowicz & Joanna Nestorowicz, 2010. "Cynicism Starts Young: Age and Entrepreneurship over Transition," Working Papers 2010-02, Faculty of Economic Sciences, University of Warsaw.
  3. Bessonova, Eugenia, 2010. "Efficiency of Manufacturing in Russia: Effect of Domestic Competition and FDI," Applied Econometrics, Publishing House "SINERGIA PRESS", Publishing House "SINERGIA PRESS", vol. 17(1), pages 106-127.
  4. Kan, Viktoriya, 2010. "Regional Determinants of New Firm Formation in a Transition Economy: The Case of Uzbekistan," PIE/CIS Discussion Paper, Center for Intergenerational Studies, Institute of Economic Research, Hitotsubashi University 490, Center for Intergenerational Studies, Institute of Economic Research, Hitotsubashi University.

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