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Government directors and business–state relations in Russia

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  • Frye, Timothy M.
  • Iwasaki, Ichiro

Abstract

We propose three ideal types of business–state relations in a transition economy and explore the impact of government directors on corporate boards for firm behavior. Using a unique dataset of joint-stock companies in Russia, we find that the presence of government directors on corporate boards is more consistent with a “collusion” ideal type of relations between firms and the state than with a managerial discipline or rent-extraction ideal type. The state sends directors to firms that both extract resources from the state, but that also provide important benefits and services to the state.

Suggested Citation

  • Frye, Timothy M. & Iwasaki, Ichiro, 2011. "Government directors and business–state relations in Russia," European Journal of Political Economy, Elsevier, vol. 27(4), pages 642-658.
  • Handle: RePEc:eee:poleco:v:27:y:2011:i:4:p:642-658
    DOI: 10.1016/j.ejpoleco.2011.06.003
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    References listed on IDEAS

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    Citations

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    Cited by:

    1. Israel Marques II, 2017. "Political Connections and Non-Traditional Investment: Evidence from Public-Private Partnerships in Vocational Education," HSE Working papers WP BRP 56/PS/2017, National Research University Higher School of Economics.
    2. Ichiro Iwasaki, 2013. "Firm-Level Determinants of Board System Choice: Evidence from Russia," Comparative Economic Studies, Palgrave Macmillan;Association for Comparative Economic Studies, vol. 55(4), pages 636-671, December.
    3. Muravyev, Alexander, 2017. "Boards of directors in Russian publicly traded companies in 1998–2014: Structure, dynamics and performance effects," Economic Systems, Elsevier, vol. 41(1), pages 5-25.
    4. Iwasaki, Ichiro, 2014. "Global financial crisis, corporate governance, and firm survival:," Journal of Comparative Economics, Elsevier, vol. 42(1), pages 178-211.
    5. repec:eee:iburev:v:26:y:2017:i:6:p:1100-1113 is not listed on IDEAS
    6. Muravyev, Alexander & Berezinets, Irina & Ilina, Yulia, 2014. "The structure of corporate boards and private benefits of control: Evidence from the Russian stock exchange," International Review of Financial Analysis, Elsevier, vol. 34(C), pages 247-261.
    7. Israel Marques, 2014. "Firms And Social Policy In The Post-Communist Bloc: Evidence From Russia," HSE Working papers WP BRP 87/EC/2014, National Research University Higher School of Economics.
    8. Ebrahim, M. Shahid & Girma, Sourafel & Shah, M. Eskandar & Williams, Jonathan, 2014. "Dynamic capital structure and political patronage: The case of Malaysia," International Review of Financial Analysis, Elsevier, vol. 31(C), pages 117-128.
    9. Addisu A. Lashitew, 2014. "The Effect of Political Connections on Credit Access: Does the Level of Financial Development Matter?," Kyklos, Wiley Blackwell, vol. 67(2), pages 227-254, May.
    10. Marques II, Israel, 2018. "Firms and social policy preferences under weak institutions : Evidence from Russia," BOFIT Discussion Papers 7/2018, Bank of Finland, Institute for Economies in Transition.
    11. Tatiana Dolgopyatova & Alexander Libman & Andrei Yakovlev, 2016. "The Unintended Benefits of Empowering Boards in Conglomerates: The Case Study of Afk Sistema," HSE Working papers WP BRP 49/MAN/2016, National Research University Higher School of Economics.

    More about this item

    Keywords

    Politically connected firm; Government directorship; Business–state relationship; Corporate governance quality; Russia;

    JEL classification:

    • G34 - Financial Economics - - Corporate Finance and Governance - - - Mergers; Acquisitions; Restructuring; Corporate Governance
    • H32 - Public Economics - - Fiscal Policies and Behavior of Economic Agents - - - Firm
    • L33 - Industrial Organization - - Nonprofit Organizations and Public Enterprise - - - Comparison of Public and Private Enterprise and Nonprofit Institutions; Privatization; Contracting Out
    • P26 - Economic Systems - - Socialist Systems and Transition Economies - - - Political Economy
    • P31 - Economic Systems - - Socialist Institutions and Their Transitions - - - Socialist Enterprises and Their Transitions
    • P35 - Economic Systems - - Socialist Institutions and Their Transitions - - - Public Finance

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