Year of Graduation
How external and internal factors influence interfirm relationships in Russia?
Faculty of Economics
Stereotyping about company’s management has changed because of formation of interfirm relationships. The statement that company’s performance results depend entirely on optimization of its individual operation has been disproved. This study aims to explore the key stage, when a company takes decision about participation in interfirm relationships. We determine the motives of market players for participating in interfirm network. Not only analysis of the incentives, but also a reflection of interfirm relationships’ specificity in various sectors of Russian economy makes the topic of this study relevant. Using theoretical perspectives provided by the literature, we apply an econometric survey to a sample, which consists of 992 largest Russian companies operating in the following industries: Construction & Real Estate, Manufacturing, Energy & Chemical, Trade & Related Services and Finance & Insurance. We develop a model that determines factors, which encourage companies from different sectors participate in interfirm cooperation; and then use a maximum likelihood estimation method to estimate it. We draw a conclusion that company's incentives associated with company’s intrinsic characteristics have more impact on company’s forecasted probability to cooperate than motives connected with external environmental features. This information is valuable for potential investors, managers, boards of directors’ members and owners of companies in the Russian current market. The developed model provides them with the level of cooperation probability forecasted using a particular company’s set of characteristics. Thus, it can help them to determine a potential partner for creating interfirm network. In addition, results reveal that the determinants of forecasted probability to cooperate differ considerably according to the sector. Forecasted probability to cooperate of companies operating in high and medium technology intensive industries are higher than this indicator of other companies. These differences have important implications for public policies and instruments for supporting interfirm relationships in such industries as Trade and Services in Russia.