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Rigid form of cooperation between industrial enterprises in the natural resources sector: Institutional trap or survival strategy

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  • Ivan A. Butakov

    (OOO UMMC-Steel, Verkhnyaya Pyshma, Sverdlovsk oblast, Russia; Ural State University of Economics, Ekaterinburg, Russia)

Abstract

Environmental changes caused by digitalization and an increase in technological innovations have led to the formation of business models based on soft forms of cooperation. Nevertheless, when it comes to industrial enterprises engaged in the natural resources sector, avoiding rigid forms of cooperation, primarily holding structures, seems unreasonable. The present study is a scientific review focused on specifying the theoretical and object-oriented basis for the formation of rigid forms of collaboration. Neoclassical economics, new institutional economics and strategic management theory constitute the methodological basis of the research. To justify the choice of the forms of cooperation by industrial enterprises operating in the natural resources sector, the author uses the theory of industrial organization, as well as property rights theory and contract theory. In the paper, general scientific methods are applied, such as content analysis, systematization and object-oriented approach. We find that the adherence to the rigid cooperation strategy is due to the special features of industrial enterprises in the natural resources sector, such as a tendency towards structural monopoly, a high threshold of minimum efficient scale, considerable manufacturing cycle time, production cyclicality, interspecific investment, etc. The results indicate that rigid forms of cooperation are evolving from vertically integrated companies to conglomerates with a network-based institutionalized nature of the participants’ interaction.

Suggested Citation

  • Ivan A. Butakov, 2021. "Rigid form of cooperation between industrial enterprises in the natural resources sector: Institutional trap or survival strategy," Upravlenets, Ural State University of Economics, vol. 12(3), pages 31-43, July.
    • Handle: RePEc:url:upravl:v:12:y:2021:i:3:p:31-43
    DOI: 10.29141/2218-5003-2021-12-3-3
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    More about this item

    Keywords

    cooperation; rigid form of cooperation; integration; holding group; natural resources sector; industrial enterprise; specific assets;
    All these keywords.

    JEL classification:

    • D21 - Microeconomics - - Production and Organizations - - - Firm Behavior: Theory
    • D23 - Microeconomics - - Production and Organizations - - - Organizational Behavior; Transaction Costs; Property Rights

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