Economics of Corporate Form: Why Do Russian Firms Prefer to Be Closed Companies?
In Russia, an overwhelming number of joint-stock companies (JSCs) choose to become closed companies despite the fact that this corporate form strays far from the primary nature of stock companies. Using the results of a Japan-Russia joint enterprise survey conducted in 2005, we examine a variety of factors as to why Russian stock companies select to become closed companies. Our empirical results suggest the following four factors encouraging many of Russian firms to be closed JSCs: (a) a widespread insider-dominating corporate ownership structure emerging as a result of the mass-privatization policy; (b) a strong orientation among managers toward closed corporate organization due to the underdeveloped capital and managerial markets; (c) slumping needs for corporate finance; and (d) insufficient financial support from local financial institutions. The empirical relationship between corporate form and ownership structure exists, even if we assume the endogeneity of the two elements.
|Date of creation:||May 2013|
|Date of revision:|
|Note:||This paper was produced as a result of a Japan-Russia joint research project entitled “Corporate Governance and Integration Processes in the Russian Economy” launched by the Institute of Economic Research, Hitotsubashi University (Tokyo) and the Institute for Industrial and Market Studies, National Research University – Higher School of Economics (Moscow). The research was financially supported by the Japan Securities Scholarship Foundation (JSSF) and grants-in-aid for scientific research from the Ministry of Education and Science of Japan (Nos. 16530149; 17203019; 21402025; 23243032). I also thank Naohito Abe, Tatiana G. Dolgopyatova and Andrei Yakovlev for their valuable comments and Jim Treadway for his editorial assistance. Needless to say, all remaining errors are mine., Revised version; first published in December 2007|
|Contact details of provider:|| Postal: 2-1 Naka, Kunitachi City, Tokyo 186-8603|
Web page: http://www.ier.hit-u.ac.jp/rrc/
More information through EDIRC
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- Demirguc-Kunt, Asli & Love, Inessa & Maksimovic, Vojislav, 2004.
"Business Environment and the Incorporation Decision,"
Policy Research Working Paper Series
3317, The World Bank.
- Demirguc-Kunt, Asli & Love, Inessa & Maksimovic, Vojislav, 2006. "Business environment and the incorporation decision," Journal of Banking & Finance, Elsevier, vol. 30(11), pages 2967-2993, November.
- Newey, Whitney K., 1987. "Efficient estimation of limited dependent variable models with endogenous explanatory variables," Journal of Econometrics, Elsevier, vol. 36(3), pages 231-250, November.
- Gordon, Roger H. & MacKie-Mason, Jeffrey K., 1994.
"Tax distortions to the choice of organizational form,"
Journal of Public Economics,
Elsevier, vol. 55(2), pages 279-306, October.
- Roger H. Gordon & Jeffrey K. MacKie--Mason, 1994. "Tax Distortions to the Choice of Organizational Form," Public Economics 9401004, EconWPA, revised 18 Jan 1994.
- Roger H. Gordon & Jeffrey K. MacKie-Mason, 1992. "Tax Distortions to the Choice of Organizational Form," NBER Working Papers 4227, National Bureau of Economic Research, Inc.
- Gordon, R.H. & Mackie-Mason, J.K., 1993. "Tax Distorsions to the Choice of Organizational Form," Memorandum 21/1993, Oslo University, Department of Economics.
- Sergei Guriev & Andrei Rachinsky, 2005.
"The Role of Oligarchs in Russian Capitalism,"
Sciences Po publications
info:hdl:2441/1cu21pio6c9, Sciences Po.
- Karpoff, Jonathan M. & Rice, Edward M., 1989. "Organizational form, share transferability, and firm performance : Evidence from the ANCSA corporations," Journal of Financial Economics, Elsevier, vol. 24(1), pages 69-105, September.
- Rivers, Douglas & Vuong, Quang H., 1988. "Limited information estimators and exogeneity tests for simultaneous probit models," Journal of Econometrics, Elsevier, vol. 39(3), pages 347-366, November.
- Blass, Asher A & Carlton, Dennis W, 2001. "The Choice of Organizational Form in Gasoline Retailing and the Cost of Laws That Limit That Choice," Journal of Law and Economics, University of Chicago Press, vol. 44(2), pages 511-24, October.
When requesting a correction, please mention this item's handle: RePEc:hit:rrcwps:3. 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: (Digital Resources Section, Hitotsubashi University Library)
If references are entirely missing, you can add them using this form.