Year of Graduation
The intensity of violent pressure on business in Russian: indicators and factors
Faculty of Sociology
In this paper we analyze the problem of violent pressure on business in Russia regions. Since the early 2000s raider attacks in Russia have become a widespread phenomenon, the existence of which harms the economy of the region, deteriorates investment climate and sometimes has unpleasant social consequences (e.g. loss of working places). The main purpose of this study is to examine links between the intensity of violent pressure on business in Russia regions and various economic, social and political factors, as well as identification of the causes of this phenomenon. Empirical analysis of the problem consists of two parts: a qualitative and a quantitative (we use «mixed method» strategy according to which two parts of data are complementary to each other).The first part of the analysis is based on qualitative data (publications in print media and internal analytics of Center of Public Procedures «Business against Corruption») and is intended to identify main strategies of hostile takeovers as well as ways to withstand violent pressure on the business. Based on 163 articles about 36 cases of violent pressure on the business, we have identified three successive stages of hostile takeovers: «ultimatum», «siege» and «capture». We found out that raiders usually use firstly the safest and cheapest tools and afterwards move to more complex and risky instruments. Relatively successful strategy for protecting businesses is to attract the attention of the media and to make conflict more public, which increases the «risk» for the raiders. Analysis of internal data obtained from CPP «BAC» indicates that there could be two types of raiders: «holders of economic resources» and «holders of power resources». Moreover, whereas law enforcement agencies may be involved in raider attacks independently, the representatives of the business, as a rule, still need to enlist the support of the administration or law enforcement officers.The second part of the research was based on an analysis of quantitative data. After considering various indicators of violent pressure on business, we come to the conclusion that «the number of appeals to the CPP «BAC» may be a suitable tool for measuring the intensity of pressure on business (after normalization by GRP). However, this instrument has a number of limitations which we try to take into account in our study. We assume that violent pressure on business grows in areas with certain «threshold conditions» which make business vulnerable to raider attacks. Thus, according to our data, the intensity of violent pressure on business is lower in oil producing regions, higher in regions with well-developed manufacturing industry, as well as regions with 6-10 % share of construction. Most vulnerable to raider attacks are such types of business as trade, construction and industrial sector. However, individual entrepreneurs also often become a victim of violent pressure on business. All these conclusions are consistent with our earlier illation that raiders seek to maximize their profit and minimize their risks. That is why intensity of pressure on business is rare in oil producing regions, and raiders mostly select medium-size companies for their attacks.We also assume that situation in judicial system may be an additional reason for hostile takeovers. Unfortunately, we have only indirect evidence of this thesis. The intensity of military pressure on business is higher in regions with a large number of economic crimes and low transparency of the judicial system.Main limitation of this study was the unavailability of various kinds of data about violent pressure on business. In our opinion the results obtained in this study indicate the necessity for further systematic study of the phenomenon of violent pressure on business and the need for gathering more statistics. Thus one of the further steps for research could be the analysis of the problem in «meso-level» (separate cities and districts), which allows us to combine qualitative and quantitative data even better.