What Limits Decentralization at Russian Firms?
The paper investigates the influence of institutional factors on decentralization of decision-making at Russian firms. Decentralization is important for firms’ growth and development. While in the absence of decentralization a firm’s growth opportunities are limited by time and abilities of its CEO, decentralization opens doors for quicker decision-making on a larger range of questions and creates room for the firm’s growth. However, decentralization is associated with agency risks and risks of information leakage. Weak judicial system, high corruption, and low level of trust increase risks associated with decentralization and, therefore, can significantly limit firms’ opportunities for decentralization. In this paper the author empirically explores the influence of corruption, quality of court system and trust on decentralization of decision-making at firms in the Russian regions. The empirical analysis presented in the paper demonstrates the important limiting influence of corruption on decentralization of decision-making at Russian firms. In the regions with higher corruption firms are less likely to decentralize and more likely to choose a management model with centralized decision-making and selection of people for top positions through connections. At the same time, the presented analysis does not reveal any significant influence of the court system’s quality or the level of trust in the Russian regions on the probability of decentralization at Russian firms.
Volume (Year): 5 (2017)
Issue (Month): (October)
|Contact details of provider:|| Postal: 82, Vernadsky pr., 117571, Moscow|
Phone: +7 (499) 956 95 86
Fax: (095) 564-85-80
Web page: http://www.rane.ru/
More information through EDIRC
When requesting a correction, please mention this item's handle: RePEc:rnp:ecopol:ep1754. See general information about how to correct material in RePEc.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (RANEPA maintainer)
If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.
If references are entirely missing, you can add them using this form.
If the full references list an item that is present in RePEc, but the system did not link to it, you can help with this form.
If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your profile, as there may be some citations waiting for confirmation.
Please note that corrections may take a couple of weeks to filter through the various RePEc services.