Regional institutions and small business in Russia

There are significant regional differences in small businesses development in most countries, especially in transition economies. In our literature review, these differences are explained in terms of a differentiated institutional environment. The aim of this chapter is to identify institutional and other regional characteristics affecting small business density in Russia. The econometric results confirmed that investment risks, lack of capital and administrative burden are constraining factors for small business development. Poor institutions push businesses into the informal sector in most North Caucasus and Far Eastern regions. Concurrently, the entrepreneurial ecosystems of certain regions (Moscow, St. Petersburg, Tatarstan, Novosibirsk, Kaliningrad regions, etc.) have a relatively rich set of institutional elements for the development of productive entrepreneurship. Our results are aimed at identification the regional best practices and providing the recommendations for entrepreneurship policy. This will allow more careful consideration of regional differences in the adoption of national laws.