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Industrial Defense Enterprises in the Russian Transition to a Capitalist System: Institutional Restrictions on Development

  • Leonid KOSALS

    (State University-Higher School of Economics, Russia)

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    The author develops the concept of 'clan capitalism' that has emerged in Russia during a period of transition. Clan capitalism has led to certain institutional restrictions on business activity: informal rules becoming more important than formal norms, etc. As well as establishing the limits for growth; such restrictions also prevent the widespread uptake of effective business strategies. The author studied the consequences of clan capitalism in Russia; citing the case of the industrial defense enterprises and analyzing trends in their performance over the last decade through a longitudinal survey of top managers. This paper describes the current development in this sector as contradictory growth due to the lack of investment and innovation but caused by a rise in the state order. The author explains the peculiarities of this growth by illustrating restrictions within the system of clan capitalism.

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    File URL: http://www.kier.kyoto-u.ac.jp/~ces/jces/01_jces_2005/05_Kosals.pdf
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    Article provided by The Japanese Society for Comparative Economic Studies (JSCES) in its journal The Journal of Comparative Economic Studies.

    Volume (Year): 1 (2005)
    Issue (Month): (July)
    Pages: 11-23

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    Handle: RePEc:cos:epaper:v:1:y:2005:p:11-23
    Contact details of provider: Web page: http://www.kier.kyoto-u.ac.jp/~ces/

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    1. Enste, Dominik & Schneider, Friedrich, 1998. "Increasing Shadow Economies all over the World - Fiction or Reality?," IZA Discussion Papers 26, Institute for the Study of Labor (IZA).
    2. Marin, Dalia, 2000. "Trust vs Illusion: What is driving Demonetization in Russia?," Discussion Papers in Economics 73, University of Munich, Department of Economics.
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