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Adjusting Boundaries of Russian Firms

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  • Lazareva Olga

Abstract

During the last decade we witnessed huge wave of reorganizations in Russian industrial sector: split-ups, spin-offs, mergers and acquisitions. Firms adjusted their boundaries according to the new economic conditions. Little is known however about this process and its determinants. The first goal of this paper is to derive general patterns of boundary change in Russian industrial sector. Second, the author seeks to identify the factors influencing firm’s decision to integrate or split up based on modern theory of a firm. In doing this, one needs to understand whether institutional structure of production, inherited from planned economy and characterized by high degree of monopolization and specificity, influenced the process of reorganizations of Russian industrial firms. In particular, author tests the factors of vertical integration suggested by transaction cost theory. Finally, the attempt is made to estimate the effect of structural change on firm performance, in particular, on productivity. In order to answer these questions the author conducts empirical study using the data from the survey of Russian industrial enterprises carried out in 1999-2000.

Suggested Citation

  • Lazareva Olga, "undated". "Adjusting Boundaries of Russian Firms," EERC Working Paper Series 04-08e, EERC Research Network, Russia and CIS.
    • Handle: RePEc:eer:wpalle:04-08e
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    References listed on IDEAS

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    1. Grossman, Sanford J & Hart, Oliver D, 1986. "The Costs and Benefits of Ownership: A Theory of Vertical and Lateral Integration," Journal of Political Economy, University of Chicago Press, vol. 94(4), pages 691-719, August.
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    3. Brown, A.N. & Ickes, B. & Ryterman, R., 1993. "The Myth of Monopoly: A New View of Industrial Structure in Russia," Papers 10-93-5, Pennsylvania State - Department of Economics.
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    6. Polona Domadenik & Lubomír Lízal & Marko Pahor, 2012. "The Effect of Enterprise Break-Ups on Performance. The Case of the Former Yugoslav Republic of Macedonia," Revue économique, Presses de Sciences-Po, vol. 63(5), pages 849-866.
    7. Bengt Holmstrom & John Roberts, 1998. "The Boundaries of the Firm Revisited," Journal of Economic Perspectives, American Economic Association, vol. 12(4), pages 73-94, Fall.
    8. Oecd, 2003. "Former Yugoslav Republic of Macedonia," Sigma Public Management Profiles 11, OECD Publishing.
    9. Kornai, Janos, 1992. "The Socialist System: The Political Economy of Communism," OUP Catalogue, Oxford University Press, number 9780198287766.
    10. Lubomir Lizal & Miroslav Singer & Jan Svejnar, 1996. "Enterprise Restructuring and Performance in the Transition," William Davidson Institute Working Papers Series 13, William Davidson Institute at the University of Michigan.
    11. Earle, John S & Estrin, Saul, 1997. "After Voucher Privatization: The Structure of Corporate Ownership in Russian Manufacturing Industry," CEPR Discussion Papers 1736, C.E.P.R. Discussion Papers.
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    Cited by:

    1. Berulava George & Lezhava David, 2007. "The impact of trust on the mode of transaction governance between manufacturer and distributor," EERC Working Paper Series 07-05e, EERC Research Network, Russia and CIS.

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    More about this item

    Keywords

    Russia; industrial firms; firm's boundaries; reorganization; transaction cost; vertical integration;
    All these keywords.

    JEL classification:

    • G32 - Financial Economics - - Corporate Finance and Governance - - - Financing Policy; Financial Risk and Risk Management; Capital and Ownership Structure; Value of Firms; Goodwill
    • G34 - Financial Economics - - Corporate Finance and Governance - - - Mergers; Acquisitions; Restructuring; Corporate Governance

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