nep-cis New Economics Papers
on Confederation of Independent States
Issue of 2007‒06‒23
two papers chosen by
Anna Y. Borodina
Perm State University

  1. How transition led to internationalization? By Cédric Durand
  2. Organized Business, Political Regimes and Property Rights across the Russian Federation By William Pyle

  1. By: Cédric Durand (CEPN - Centre d'économie de l'Université de Paris Nord - [CNRS : UMR7115] - [Université Paris-Nord - Paris XIII], CEMI - Centre d'étude des modes d'industrialisation - [Ecole des Hautes Etudes en Sciences Sociales])
    Abstract: Since 2002 Russian metallurgical firms have been investing abroad. Taking advantage of the very positive economic climate in the sector, they settle in peripheral as well as in core countries of the world economy. Russia has upgraded from the 50th to the 24th rank between 1995 and 2004 as far as FDI outward flow is concerned [CNUCED, 2005]. Although the Russian FDI stock is still quite limited if compared to other countries, it is five times greater in 2004 than it was in 2000 [BCR, 2005]. The emergence of Russian transnational corporations is a new step in the post-soviet transformation: after the break-up of the old system and a chaotic moment of reorganization, some firms are now building global strategies of growth. This paper addresses this unexpected outcome of the transition process while giving evidence of the trajectory of the metallurgical branch. However, it also focuses on another point. Why do firms internationalize? The scope of the Russian metallurgical shift, its simultaneity and its quickness represent a great opportunity to discuss different hypotheses suggested by the literature and to try to learn from the transition process on that point. This article puts forward an institutional and systemic perspective on multinational corporations. We focus on three kinds of determinants of the internationalization: dynamics of growth based on the resources of the firm, an advantage seeking behavior in order to improve the firm's position in front of its international competitors and a complex interaction vis-a-vis the Russian political power.
    Keywords: transnational corporations ; Foreign direct investment ; Metallurgy ; Russia
    Date: 2007–06–13
  2. By: William Pyle
    Abstract: This article explores the inter-relationship of collective action within the business community, the nature of the political regime and the security of firms’ property rights. Drawing on a pair of surveys recently administered in Russia, we present evidence that post-communist business associations have begun to coordinate business influence over state actors in a manner that is sensitive to regional politics. A firm’s ability to defend itself from government predation and to shape its institutional environment as well as its propensity to invest in physical capital are strongly related to both its membership in a business association and the level of democratization in its region. Of particular note, the positive effect of association membership on securing property rights increases in less democratic regions. The evidence, that is, suggests that collective action in the business community substitutes for democratic pressure in constraining public officials.
    Date: 2007–03

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