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


  • Bruno, Randolph Luca

    () (University College London)

  • Bytchkova, Maria

    () (London School of Economics)

  • Estrin, Saul

    () (London School of Economics)


We analyse a three-year panel data set of Russian firms spanning from 2000 to 2002 and we investigate the effect of regional institutional and economic factors on entry rates across time, industries and regions. The paper builds on a novel database and exploits inter-regional variation in a large number of institutional variables. We find entry rates in Russia are not especially low by international standards and are correlated with natural entry rates, institutions and firm size. Furthermore, industries that - for scale and technological reasons - are characterised by higher entry rates will experience lower entry within regions affected by higher business risk. In other words industries that naturally have low entry barriers are most affected by business constraints.

Suggested Citation

  • Bruno, Randolph Luca & Bytchkova, Maria & Estrin, Saul, 2008. "Institutional Determinants of New Firm Entry in Russia: A Cross Regional Analysis," IZA Discussion Papers 3724, Institute for the Study of Labor (IZA).
  • Handle: RePEc:iza:izadps:dp3724

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    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.
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    4. 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, vol. 29(C), pages 247-265.
    5. 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.
    6. repec:bla:etrans:v:25:y:2017:i:3:p:471-493 is not listed on IDEAS
    7. 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.
    8. Sokolov, Vladimir & Solanko, Laura, 2016. "Political influence, firm performance and survival," BOFIT Discussion Papers 20/2016, Bank of Finland, Institute for Economies in Transition.
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    10. Çagatay Bircan & Ralph de Haas, 2015. "The Limits of Lending: Banks and Technology Adoption across Russia," CESifo Working Paper Series 5461, CESifo Group Munich.
    11. 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.
    12. Iwasaki, Ichiro & Maurel, Mathilde & Meunier, Bogdan, 2016. "Firm entry and exit during a crisis period: Evidence from Russian regions," Russian Journal of Economics, Elsevier, vol. 2(2), pages 162-191.
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    14. 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.
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    16. 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.
    17. 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, September.
    18. 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.
    19. 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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    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


    business environment; Tobit model; entry rate;

    JEL classification:

    • D21 - Microeconomics - - Production and Organizations - - - Firm Behavior: Theory
    • 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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