Factory productivity and the concession system of incorporation in late Imperial Russia, 1894-1908

"In late Imperial Russia, commercial credit was scarce, and because the Empire had no general incorporation law, all firms wishing to incorporate needed to obtain the Tsar’s signature on their charters, a time-consuming and expensive process. Yet, over four thousand firms incorporated between 1700 and 1914. I identify the characteristics of firms choosing to incorporate and measure the gains to productivity and growth in machine power enjoyed by corporations from a novel panel database of manufactur- ing enterprises I compiled from Imperial Russian factory censuses conducted in 1894, 1900, and 1908. In the cross section, factories owned by corporations have higher av- erage revenue, bigger machines, and more workers. While the distribution of TFP for partnerships and single proprietorships has a long lower tail, the distribution for corporations does not. Factories that incorporate next period have higher average rev- enue per worker but not larger machines. After incorporating, however, factories have higher average revenue per worker and larger machines, suggesting the importance of incorporation for capital accumulation."