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Protection or Repression: The Impact of Judiciary Behavior on SME Development in Russia

Author

Listed:
  • Vladimir Kozlov

    (National Research University Higher School of Economics)

  • Alexander Libman

    (Frankfurt School of Finance & Management)

Abstract

The paper investigates the role of judiciary behavior in the development of SMEs in Russian regions. Specifically, it looks at how repressive Russian courts are in punishing economic crime. Repressiveness of courts can be both an obstacle of business development (if it serves the predatory behavior of bureaucrats) and a factor improving the environment for business (if it reduces risks of illicit behavior on the side of SMEs’ counterparts). Utilizing the differences in court repressiveness and SME development across Russian regions, we show that court behavior indeed affects the development of SMEs, at least as captured by the official statistics. For small business in the area of trade, higher repressiveness of courts in the matters of fraud seems to encourage business development, while repressiveness in corruption and illicit entrepreneurship has a negative effect.

Suggested Citation

  • Vladimir Kozlov & Alexander Libman, 2014. "Protection or Repression: The Impact of Judiciary Behavior on SME Development in Russia," International Journal of Entrepreneurial Knowledge, Center for International Scientific Research of VSO and VSPP, vol. 2(1), pages 14-27, June.
    • Handle: RePEc:jek:journl:v:2:y:2014:i:1:p:14-27
    as

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    File URL: http://ijek.org/files/IJEK_1-2014v2/ijek_1-2014,v.2_kozlov,v.libman,a..pdf
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    References listed on IDEAS

    as
    1. Bardhan, Pranab, 2006. "The economist's approach to the problem of corruption," World Development, Elsevier, vol. 34(2), pages 341-348, February.
    2. Allen, Franklin & Chakrabarti, Rajesh & De, Sankar & Qian, Jun “QJ” & Qian, Meijun, 2012. "Financing firms in India," Journal of Financial Intermediation, Elsevier, vol. 21(3), pages 409-445.
    3. Evgeny Yakovlev & Ekaterina Zhuravskaya, 2013. "The Unequal Enforcement Of Liberalization: Evidence From Russia'S Reform Of Business Regulation," Journal of the European Economic Association, European Economic Association, vol. 11(4), pages 808-838, August.
    4. André Schultz & Vladimir Kozlov & Alexander Libman, 2014. "Judicial alignment and criminal justice: evidence from Russian courts," Post-Soviet Affairs, Taylor & Francis Journals, vol. 30(2-3), pages 137-170, May.
    Full references (including those not matched with items on IDEAS)

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    More about this item

    Keywords

    small business; judicial behavior; Russian regions;
    All these keywords.

    JEL classification:

    • L26 - Industrial Organization - - Firm Objectives, Organization, and Behavior - - - Entrepreneurship
    • K14 - Law and Economics - - Basic Areas of Law - - - Criminal Law

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