BOFIT Discussion Papers, Institute for Economies in Transition, Bank of Finland
State-business relations and improvement of corporate governance in Russia
Abstract: In this paper, we analyze the influence of the state on
the improvement of corporate governance in Russia of the early 2000s.
Taking into account the low quality of market institutions in the 1990s
(i.e., the market failure phenomenon), we assume that state intervention as
the “second best” institution had a positive impact in this case. Using a
dataset of 822 joint-stock companies, we tested this hypothesis in two
types of corporate models – state-owned or mixed firms and “politically
connected” firms. The first model confirmed a strong positive influence of
state ownership on the corporate governance in Russia in 2001-2004. The
estimation results of this model are statistically robust in different
specifications. We connect this result with attempts of the Russian
government to use standard mechanisms and procedures of corporate
governance to defend its property rights in its relations with state-owned
and mixed enterprises.
Keywords: corporate governance; market institutions; state-owned companies; Russia; (follow links to similar papers)
JEL-Codes: G34; (follow links to similar papers)
27 pages, December 14, 2008
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