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Industrial Associations as a Channel of Business-Government Interactions in an Imperfect Institutional Environment: The Russian Case

Author

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  • Andrei Yakovlev
  • Andrei Govorun

Abstract

International lessons from emerging economies suggest that business associations may provide an effective channel of communication between the government and the private sector. This function of business associations may become still more important in transition economies, where old mechanisms for coordination of enterprise activities have been destroyed, but the new ones have not been established yet. In this context, Russian experience is a matter of interest, because Russia was regarded for a long time as a striking example of state failures and market failures. Consequently, the key point of our study was a description of the role and place of business associations in the present-day Russian economy and their interaction with member companies and bodies of state administration. Relying on the survey data of 957 manufacturing firms, conducted in 2009 we found that business associations are more frequently joined by larger companies, firms located in regional capital cities, and firms active in investment and innovation. By contrast, business associations tend to be less frequently joined by business groups' subsidiaries and firms that were non-responsive about their respective ownership structures. Our regression analysis has also confirmed that business associations are a component of what Frye (2002) calls an "elite exchange" - although only on regional and local levels. These "exchanges" imply that members of business associations, on the one hand, more actively assist regional and local authorities in social development of their regions, and on the other hand, they more often receive support from authorities. However, this effect is insignificant in terms of support from the federal government. In general, our results allow us to believe that at present, business associations (especially the industry-wide and "leading" ones) consolidate the most active, advanced companies and act as collective representatives of their interests. For this reason, business associations can be regarded as interface units between the authorities and businesses and as a possible instrument for promotion of economic development.

Suggested Citation

  • Andrei Yakovlev & Andrei Govorun, 2011. "Industrial Associations as a Channel of Business-Government Interactions in an Imperfect Institutional Environment: The Russian Case," UCL SSEES Economics and Business working paper series 116, UCL School of Slavonic and East European Studies (SSEES).
  • Handle: RePEc:see:wpaper:116
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    References listed on IDEAS

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    1. Coates, Dennis & Heckelman, Jac C. & Wilson, Bonnie, 2010. "The political economy of investment: Sclerotic effects from interest groups," European Journal of Political Economy, Elsevier, vol. 26(2), pages 208-221, June.
    2. Rodrik, Dani, 2004. "Industrial Policy for the Twenty-First Century," CEPR Discussion Papers 4767, C.E.P.R. Discussion Papers.
    3. Jac C. Heckelman, 2007. "Explaining the Rain: The Rise and Decline of Nations after 25 Years," Southern Economic Journal, Southern Economic Association, vol. 74(1), pages 18-33, July.
    4. repec:hrv:faseco:33078568 is not listed on IDEAS
    5. Ricardo Hausmann & Dani Rodrik & Charles F. Sabel, 2008. "Reconfiguring Industrial Policy: A Framework with an Application to South Africa," CID Working Papers 168, Center for International Development at Harvard University.
    6. William Pyle, 2007. "Organized Business, Political Regimes and Property Rights across the Russian Federation," Middlebury College Working Paper Series 0703, Middlebury College, Department of Economics.
    7. Andrei Yakovlev & Yuri Simachev & Yuri Danilov, 2010. "The Russian corporation: patterns of behaviour during the crisis," Post-Communist Economies, Taylor & Francis Journals, vol. 22(2), pages 129-140.
    8. Andrei Shleifer & Daniel Treisman, 2005. "A Normal Country: Russia After Communism," Journal of Economic Perspectives, American Economic Association, vol. 19(1), pages 151-174, Winter.
    9. Avdasheva, Svetlana & Golikova, Victoria & Sugiura, Fumikazu & Yakovlev, Andrei, 2007. "External Relationship of Russian Corporations," Discussion Paper Series b37, Institute of Economic Research, Hitotsubashi University.
    10. A. Yakovlev., 2007. "The Russian Corporation and Regional Governments: Models of Interrelations and Their Evolution," VOPROSY ECONOMIKI, N.P. Redaktsiya zhurnala "Voprosy Economiki", vol. 1.
    11. Pyle, William, 2007. "Organized business, political regimes and property rights across the Russian Federation," BOFIT Discussion Papers 18/2007, Bank of Finland, Institute for Economies in Transition.
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    1. repec:nwe:eajour:y:2017:i:4:p:495-514 is not listed on IDEAS

    More about this item

    JEL classification:

    • L31 - Industrial Organization - - Nonprofit Organizations and Public Enterprise - - - Nonprofit Institutions; NGOs; Social Entrepreneurship
    • O2 - Economic Development, Innovation, Technological Change, and Growth - - Development Planning and Policy
    • O17 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Formal and Informal Sectors; Shadow Economy; Institutional Arrangements

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