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Russia's retreat to statization and the implications for business

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  • McCarthy, Daniel J.
  • Puffer, Sheila M.
  • Naumov, Alexander I.

Abstract

Despite the many problems that emerged during Russia's experiment with a market economy in the 1990s, Western firms are not likely to forego the lure that still exists in that market of 150 million people. Understanding the economic and political developments of that decade, and their effects upon business, can provide insights into the potential for business opportunities in the coming years. This article is based on a longitudinal field study of the political and economic environment for businesses in Russia, supplemented by statistical data and other information from published sources. We analyze the major economic and political developments during the 1990s and classify them in four stages --commercialization, privatization, nomenklatura, and statization. A scenario is then presented in which the statization stage, a period of increased state involvement in the economy, will likely continue in the next decade. An enlarged state role, however, is expected to coexist with a still evolving private sector. The article concludes with implications for Western firms doing business in Russia's mixed economy.

Suggested Citation

  • McCarthy, Daniel J. & Puffer, Sheila M. & Naumov, Alexander I., 2000. "Russia's retreat to statization and the implications for business," Journal of World Business, Elsevier, vol. 35(3), pages 256-274.
  • Handle: RePEc:eee:worbus:v:35:y:2000:i:3:p:256-274
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    References listed on IDEAS

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    1. Zhuplev, Anatoly & Kon'kov, Alexander & Kiesner, Fred, 1998. "Russian and American small business:: Motivations and obstacles," European Management Journal, Elsevier, vol. 16(4), pages 505-516, August.
    2. McCarthy, Daniel J. & Puffer, Sheila M., 1997. "Strategic investment flexibility for MNE success in Russia: Evolving beyond entry modes," Journal of World Business, Elsevier, vol. 32(4), pages 293-319, January.
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    Cited by:

    1. Wright, Mike & Filatotchev, Igor & Buck, Trevor & Bishop, Kate, 2002. "Foreign partners in the Former Soviet Union," Journal of World Business, Elsevier, vol. 37(3), pages 165-179, October.
    2. Sarah E. A. Dixon & Klaus E. Meyer & Marc Day, 2010. "Stages of Organizational Transformation in Transition Economies: A Dynamic Capabilities Approach," Journal of Management Studies, Wiley Blackwell, vol. 47(3), pages 416-436, May.
    3. Buck, Trevor, 2003. "Modern Russian corporate governance: convergent forces or product of Russia's history?," Journal of World Business, Elsevier, vol. 38(4), pages 299-313, November.
    4. Puffer, Sheila M. & McCarthy, Daniel J., 2007. "Can Russia's state-managed, network capitalism be competitive?: Institutional pull versus institutional push," Journal of World Business, Elsevier, vol. 42(1), pages 1-13, March.
    5. McCarthy, Daniel J. & Puffer, Sheila M., 2003. "Corporate governance in Russia: a framework for analysis," Journal of World Business, Elsevier, vol. 38(4), pages 397-415, November.
    6. Meyer, Klaus E., 2002. "Management challenges in privatization acquisitions in transition economies," Journal of World Business, Elsevier, vol. 37(4), pages 266-276, January.
    7. Puffer, Sheila M. & McCarthy, Daniel J., 2003. "The emergence of corporate governance in Russia," Journal of World Business, Elsevier, vol. 38(4), pages 284-298, November.
    8. Melkumov, Dmitri, 2009. "Institutional background as a determinant of boards of directors' internal and external roles: The case of Russia," Journal of World Business, Elsevier, vol. 44(1), pages 94-103, January.
    9. repec:spr:manint:v:46:y:2006:i:2:d:10.1007_s11575-006-0044-3 is not listed on IDEAS
    10. Robertson, Christopher J. & Gilley, K. Matthew & Street, Marc D., 2003. "The relationship between ethics and firm practices in Russia and the United States," Journal of World Business, Elsevier, vol. 38(4), pages 375-384, November.

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