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Industrial Associations as a Channel of Business-Government Interactions in an Imperfect Institutional Environment: The Russian Case

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  • Yakovlev, Andrei
  • Govorun, Andrei

Abstract

International lessons from emerging economies suggest that business associations may provide an effective channel of communication between the government and the private sector. This function of business associations may become still more important in transition economies, where old mechanisms for coordinating enterprise activities have been destroyed, while the new ones have not been established yet. In this context, Russian experience is a matter of interest, because for a long time, Russia was regarded as a striking example of state failures and market failures. Consequently, the key point of our study was a description of the role and place of business associations in the presentday Russian economy and their interaction with member companies and bodies of state administration. Relying on the survey data of 957 manufacturing firms conducted in 2009, we found that business associations are more frequently joined by larger companies, firms located in regional capital cities, and firms active in investment and innovation. By contrast, business associations tend to be less frequently joined by business groups' subsidiaries and firms that were non-responsive about their respective ownership structures. Our regression analysis has also confirmed that business associations are a component of what Frye (2002) calls an 'elite exchange'- although only on regional and local levels. These 'exchanges' imply that members of business associations, on the one hand, more actively assist regional and local authorities in social development of their regions, and on the other hand more often receive support from authorities. However, this effect is insignificant in terms of support from the federal government. In general, our results allow us to believe that at present, business associations (especially the industry-wide and 'leading' ones) consolidate the most active, advanced companies and act as collective representatives of their interests. For this reason, business associations can be regarded as interface units between the authorities and businesses and as a possible instrument for promotion of economic development.

Suggested Citation

  • Yakovlev, Andrei & Govorun, Andrei, 2011. "Industrial Associations as a Channel of Business-Government Interactions in an Imperfect Institutional Environment: The Russian Case," IWH Discussion Papers 16/2011, Halle Institute for Economic Research (IWH).
    • Handle: RePEc:zbw:iwhdps:iwh-16-11
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    Cited by:

    1. Andrei Yakovlev & Lev Freinkman & Anton Zolotov, 2017. "The Collective Action of Think Tanks as a Driver for Reforms: The Case of the Russian Analytical Community," Economic Alternatives, University of National and World Economy, Sofia, Bulgaria, issue 4, pages 495-514, December.

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    More about this item

    Keywords

    business associations; economic growth; state-business relations; collective actions; Wirtschaftsverbände; Wirtschaftswachstum; Staat-Wirtschaft-Beziehungen; Verbandsaktivitäten;
    All these keywords.

    JEL classification:

    • L31 - Industrial Organization - - Nonprofit Organizations and Public Enterprise - - - Nonprofit Institutions; NGOs; Social Entrepreneurship
    • O17 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Formal and Informal Sectors; Shadow Economy; Institutional Arrangements

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