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Institutions, exchange and trust: A study of the Russian transition to a market economy

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  • Johanson, Martin

Abstract

A fundamental element of planned economies is the idea that exchange between units and firms should be planned by authorities remote from the performance of the exchange. The institutions, where plan governance is the main mechanism, are therefore assumed to affect how trust is developed and maintained in an economy. However, when the planned economy undergoes institutional changes and plan governance erodes, trust is likely to play a different role. The paper proposes a model for analysis of development of trust depending on the institutions involved and the exchange characteristics. The model suggests that both inter-unit exchanges and inter-firm exchanges contain three dimensions, which are influenced by the degree of plan governance: knowledge use, interaction, and dynamics. Depending on the plan governance, the use of the knowledge produced takes different forms, but the plan governance also influences the interaction in the exchanges. Moreover, it is proposed that plan governance has an effect on the exchange dynamics. A 10-year longitudinal one-firm case study from the Russian printing industry is divided into two periods: the planned economy between 1987 and 1991 and the transition economy from 1992 to 1997. It shows that plan governance in various degrees influenced the exchanges, which, in turn, gave a different level of importance to the role of trust in the economy.

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  • Johanson, Martin, 2008. "Institutions, exchange and trust: A study of the Russian transition to a market economy," Journal of International Management, Elsevier, vol. 14(1), pages 46-64, March.
    • Handle: RePEc:eee:intman:v:14:y:2008:i:1:p:46-64
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    Cited by:

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    2. Gelbuda, Modestas & Meyer, Klaus E. & Delios, Andrew, 2008. "International business and institutional development in Central and Eastern Europe," Journal of International Management, Elsevier, vol. 14(1), pages 1-11, March.
    3. Oliveira, Luis & Johanson, Martin, 2021. "Trust and firm internationalization: Dark-side effects on internationalization speed and how to alleviate them," Journal of Business Research, Elsevier, vol. 133(C), pages 1-12.
    4. Moser, Roger & Kuklinski, Christian Paul Jian-Wei & Srivastava, Mohit, 2017. "Information processing fit in the context of emerging markets: An analysis of foreign SBUs in China," Journal of Business Research, Elsevier, vol. 70(C), pages 234-247.
    5. Maria Smirnova & Vera Rebiazina & Irina Moreva, 2014. "Transforming Industry Landscapein Response to the Transition of the Economy – The Case of the Russian Bakery Industry," Tržište/Market, Faculty of Economics and Business, University of Zagreb, vol. 26(1), pages 23-44.

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