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State-controlled economies vs. rent-seeking states: Why small and medium enterprises might support state officials

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  • Julia Ivy

Abstract

This study examines the reasons for support that small and medium enterprises (SMEs) provide to government representatives of their choice (in the form of donations, influence through their networks, information and votes). The study tests stakeholder and social capital approaches as legitimate explanations for SMEs’ relationships with state representatives in different transition economies, specifically Belarus and Ukraine. The study shows that the stakeholder approach is sensitive to business environments and more applicable in a rent-seeking state where the parties perceive value in their exchange. Social relations motivate the SMEs’ support in both types of transition economies.

Suggested Citation

  • Julia Ivy, 2013. "State-controlled economies vs. rent-seeking states: Why small and medium enterprises might support state officials," Entrepreneurship & Regional Development, Taylor & Francis Journals, vol. 25(3-4), pages 195-221, April.
    • Handle: RePEc:taf:entreg:v:25:y:2013:i:3-4:p:195-221
    DOI: 10.1080/08985626.2012.710265
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    1. Alchian, Armen A & Demsetz, Harold, 1972. "Production , Information Costs, and Economic Organization," American Economic Review, American Economic Association, vol. 62(5), pages 777-795, December.
    2. Jensen, Michael C. & Meckling, William H., 1976. "Theory of the firm: Managerial behavior, agency costs and ownership structure," Journal of Financial Economics, Elsevier, vol. 3(4), pages 305-360, October.
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    2. Du, Weijian & Li, Mengjie & Wang, Faming, 2020. "Role of rent-seeking or technological progress in maintaining the monopoly power of energy enterprises: An empirical analysis based on micro-data from China," Energy, Elsevier, vol. 202(C).
    3. Rodgers, Peter & Vershinina, Natalia & Khan, Zaheer & Stokes, Peter, 2022. "Small firms’ non-market strategies in response to dysfunctional institutional settings of emerging markets," International Business Review, Elsevier, vol. 31(4).
    4. Daria Volchek & Ari Jantunen & Sami Saarenketo, 2013. "The institutional environment for international entrepreneurship in Russia: Reflections on growth decisions and performance in SMEs," Journal of International Entrepreneurship, Springer, vol. 11(4), pages 320-350, December.
    5. Chan Yang & Xiaogang He & Xiaoyan Wang & Jinjun Nie, 2022. "The Influence of Family Social Status on Farmer Entrepreneurship: Empirical Analysis Based on Thousand Villages Survey in China," Sustainability, MDPI, vol. 14(14), pages 1-27, July.
    6. Thang V. Nguyen & Minh H. Doan & Nhung H. Tran, 2021. "The perpetuation of bribery–prone relationships: A study from Vietnamese public officials," Public Administration & Development, Blackwell Publishing, vol. 41(5), pages 244-256, December.

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