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Institutional Determinants of New Firm Entry in Russia: A Cross-Regional Analysis

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  • Randolph Luca Bruno

    (University College London, Fondazione Rodolfo DeBenedetti, and IZA)

  • Maria Bytchkova

    (London School of Economics and Political Science)

  • Saul Estrin

    (London School of Economics and Political Science, CEPR and IZA)

Abstract

We investigate how the regional institutional environment—in particular, the political environment—affects Russian new firm entry across regions, industries, firm size classes, and time. We find that entry rates in Russia are explained by natural entry rates and the institutional environment. Industries that are characterized by low entry barriers in developed market economies are found to have lower entry rates in regions subject to greater political fluidity, as in the case of gubernatorial change. We also find that higher levels of political fluidity and democracy increase relative entry rates for small-sized firms but reduce them for medium-sized or large ones. © 2013 The President and Fellows of Harvard College and the Massachusetts Institute of Technology.

Suggested Citation

  • Randolph Luca Bruno & Maria Bytchkova & Saul Estrin, 2013. "Institutional Determinants of New Firm Entry in Russia: A Cross-Regional Analysis," The Review of Economics and Statistics, MIT Press, vol. 95(5), pages 1740-1749, December.
  • Handle: RePEc:tpr:restat:v:95:y:2013:i:5:p:1740-1749
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    Cited by:

    1. Estrin, Saul & Meyer, Klaus E. & Nielsen, Bo B. & Nielsen, Sabina, 2016. "Home country institutions and the internationalization of state owned enterprises: a cross-country analysis," LSE Research Online Documents on Economics 64605, London School of Economics and Political Science, LSE Library.
    2. repec:dgr:rugggd:gd-112 is not listed on IDEAS
    3. Eugenia Bessonova & Gonchar Ksenia, 2017. "Structural Decisions of Multinationals in Regions with Weak Courts," HSE Working papers WP BRP 161/EC/2017, National Research University Higher School of Economics.
    4. Bessonova, Eugenia, 2010. "Efficiency of Manufacturing in Russia: Effect of Domestic Competition and FDI," Applied Econometrics, Publishing House "SINERGIA PRESS", vol. 17(1), pages 106-127.
    5. Sokolov, Vladimir & Solanko, Laura, 2016. "Political influence, firm performance and survival," BOFIT Discussion Papers 20/2016, Bank of Finland, Institute for Economies in Transition.
    6. repec:iza:izawol:journl:y:2015:i:180:p:1-10 is not listed on IDEAS
    7. Çagatay Bircan & Ralph de Haas, 2015. "The Limits of Lending: Banks and Technology Adoption across Russia," CESifo Working Paper Series 5461, CESifo Group Munich.
    8. Sharafutdinova, Gulnaz & Kisunko, Gregory, 2014. "Governors and governing institutions: a comparative study of state-business relations in Russia's regions," Policy Research Working Paper Series 7038, The World Bank.
    9. repec:kap:jtecht:v:42:y:2017:i:5:d:10.1007_s10961-016-9474-7 is not listed on IDEAS
    10. Estrin, Saul & Meyer, Klaus E. & Nielsen, Bo B. & Nielsen, Sabina, 2016. "Home country institutions and the internationalization of state owned enterprises: A cross-country analysis," Journal of World Business, Elsevier, vol. 51(2), pages 294-307.
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    12. Randolph Luca Bruno, 2015. "New firms entry, labor reallocation, and institutions in transition economies," IZA World of Labor, Institute for the Study of Labor (IZA), pages 180-180.
    13. Estrin, Saul & Prevezer, Martha, 2010. "A survey on institutions and new firm entry: How and why do entry rates differ in emerging markets?," Economic Systems, Elsevier, vol. 34(3), pages 289-308, September.
    14. Joanna Tyrowicz & Joanna Nestorowicz, 2010. "Cynicism Starts Young: Age and Entrepreneurship over Transition," Working Papers 2010-02, Faculty of Economic Sciences, University of Warsaw.
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    16. repec:eee:rujoec:v:2:y:2016:i:2:p:162-191 is not listed on IDEAS
    17. Davydova, Yulia & Sokolov, Vladimir, 2014. "The real effects of financial constraints: Evidence from a debt subsidization program targeted at strategic firms," Journal of Empirical Finance, Elsevier, pages 247-265.
    18. Iwasaki, Ichiro & Maurel, Mathilde & Meunier, Bogdan, 2016. "Firm entry and exit during a crisis period: Evidence from Russian regions," Russian Journal of Economics, Elsevier, pages 162-191.
    19. David Szakonyi, 2017. "Businesspeople in Elected Office: Identifying Private Benefits from Firm-Level Returns," Working Papers 2017-20, The George Washington University, Institute for International Economic Policy.
    20. Sokolov, Vladimir & Solanko, Laura, 2016. "Political influence, firm performance and survival," BOFIT Discussion Papers 20/2016, Bank of Finland, Institute for Economies in Transition.
    21. Kan, Viktoriya, 2010. "Regional Determinants of New Firm Formation in a Transition Economy: The Case of Uzbekistan," PIE/CIS Discussion Paper 490, Center for Intergenerational Studies, Institute of Economic Research, Hitotsubashi University.

    More about this item

    Keywords

    entry rate; institutions; democracy;

    JEL classification:

    • D22 - Microeconomics - - Production and Organizations - - - Firm Behavior: Empirical Analysis
    • L26 - Industrial Organization - - Firm Objectives, Organization, and Behavior - - - Entrepreneurship
    • P31 - Economic Systems - - Socialist Institutions and Their Transitions - - - Socialist Enterprises and Their Transitions

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