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Corporate control and governance practices in Russia

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  • Yuko Iji

    (UCL School of Slavonic and East European Studies)

Abstract

In Russia, the problem of corporate governance has become a frequent subject for discussion. Stories now abound about questionable corporate governance practices, such as share dilution, asset stripping, transfer pricing, complex ownership structures, limiting shareholders from attending the shareholders meetings. These practices, which have come to constitute corporate governance abuses to company shareholders, are considered to be factors adversely affecting the investment climate. At first glance, these non-transparent practices are a collection of independent cases of managerial malfeasance that are abusive to investors. However, there seems to be an internal logic in these widely used practices, as they have been functional for Russian corporates to navigate through circumstances characterised by an imperfect formal framework. The aim of this paper is to analyse such functionalities of the practices in light of an evolution of corporate Russia. Taking Yukos Oil Company as a case study, the paper demonstrates that resorting to these practices was instrumental in a process of ensuring corporate survival and strengthening market position by establishing a coherent corporate entity. This paper emphasises that these practices represent rational and logical responses by economic agents to the prevailing conditions shaped by policy choices, political and macroeconomic environment, and institutions.

Suggested Citation

  • Yuko Iji, 2003. "Corporate control and governance practices in Russia," UCL SSEES Economics and Business working paper series 33, UCL School of Slavonic and East European Studies (SSEES).
  • Handle: RePEc:see:wpaper:33
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    File URL: http://discovery.ucl.ac.uk/17543/1/17543.pdf
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    References listed on IDEAS

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    1. Jennifer I. Considine & William A. Kerr, 2002. "The Russian Oil Economy," Books, Edward Elgar Publishing, number 2491.
    2. Aoki, Masahiko, 2001. "Information, Corporate Governance, and Institutional Diversity: Competitiveness in Japan, the USA, and the Transitional Economies," OUP Catalogue, Oxford University Press, number 9780198297031.
    3. William Tompson, 1997. "Old habits die hard: Fiscal imperatives, state regulation and the role of Russia's banks," Europe-Asia Studies, Taylor & Francis Journals, vol. 49(7), pages 1159-1185.
    4. Olga Kuznetsov & Andrei Kuznetsov, 1999. "The State as a Shareholder: Responsibilities and Objectives," Europe-Asia Studies, Taylor & Francis Journals, vol. 51(3), pages 433-445.
    5. Masahiko Aoki, 2001. "Toward a Comparative Institutional Analysis," MIT Press Books, The MIT Press, edition 1, volume 1, number 0262011875, December.
    6. Mr. Christian Mumssen & Ms. Irina Dolinskaya & Mr. Simon Commander & Ms. Irina Tytell, 2000. "Determinants of Barter in Russia: An Empirical Analysis," IMF Working Papers 2000/155, International Monetary Fund.
    7. Keasey, Kevin & Thompson, Steve & Wright, Mike (ed.), 1997. "Corporate Governance: Economic and Financial Issues," OUP Catalogue, Oxford University Press, number 9780198289913.
    8. Erik BERGLÖF & Ernst-Ludwig VON THADDEN, 1999. "The Changing Corporate Governance Paradigm : Implications for Transition and Developing Countries," Cahiers de Recherches Economiques du Département d'économie 9912, Université de Lausanne, Faculté des HEC, Département d’économie.
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    Cited by:

    1. Andreas Heinrich & Aleksandra Lis & Heiko Pleines, 2007. "Factors Influencing Corporate Governance in post-Socialist Companies: an Analytical Framework," William Davidson Institute Working Papers Series wp896, William Davidson Institute at the University of Michigan.

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