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Directions and factors of adaptation of Russian enterprises to the new conditions of economic development

Priority areas of development: economics
2019
The project has been carried out as part of the HSE Program of Fundamental Studies.

Goal of research

To analyze the factors of efficiency of Russian firms and their adaptation to the new conditions of economic development.

Methodology

Research methodology combines quantitative and qualitative methods, as well as comparative analysis and case-study depending on certain research directions.

Empirical base of research

Taking into account all the research directionsin the framework of the project the empirical base includes dataset of Russian Manufacturing Enterprises Competitiveness Monitoring 2018 by the Institute for Industrial and Market Studies (IIMS), database of European Firms in the Global Economy (EFIGE) 2010 project by BREUGEL, database of Russian Firms in the Global Economy 2014 (RuFIGE) project by IIMS.

Additionally, data on all members of Forbes-Russia 2004-2018 was collected to create a database for further analysis in the framework of political and economic risks of doing business in Russia and China research direction.

Results of research

The analysis of the correlation of individual characteristics of CEOs and the results of innovative activities of enterprises showed that:

  • At Russian enterprises, directors that own family enterprises are significantly more likely to introduce new technologies (this is typical for small and medium-sized businesses, and not for large enterprises.

  • In Russia, the best results in terms of product innovations are shown by firms where directors belong to the middle age group.

  • While in Europe enterprises headed by women show significantly worse results in innovation, in Russia the level of innovation activity does not differ by CEO gender; and in traditional sectors the level of innovation activity of enterprises with female directors in terms of product innovations is even higher.

The results of analysis of the role of boards of directors in Russian companies, the relationship between ownership and corporate control structures and characteristics of boards of directors, as well as business performance are the following:

  • For 36% of Russian firms in the sample the only players that determine the composition of the board of directors are the leading owners. The larger the company, the weaker the influence of owners in the process of nomination.

  • In general, the members of the board of directors in Russian companies do not have a diverse previous work experience: there is a serious predominance of insiders. The greatest diversity is typical for subsidiaries, as well as large enterprises and firms established in 2009-2013. Also, the level of diversity in the board of directors in terms of previous work experience is steadily higher in firms with the participation of the authorities in capital.

  • People with external experience are more likely to become members of board of directors in companies with an average level of concentration, separation of the management function from ownership and in subsidiaries.

  • The role of the board of directors is most noticeable when making decisions on such topics as the organization of management, long-term strategy and attracting new business partners

The analysis of the relationship between decentralization of management, innovation activity and innovation results of enterprises operating in weak institutional environment showed the following:

  • Decentralized firms are more successful in innovation: they are twice as likely to introduce innovative products that are new to the market.

  • Opportunities for successful decentralization of firms are not limited to countries with perfect institutions, but may appear in countries with a wide range of institutional conditions.

According to the analysis of changes in the models of business-state relations in Russia in terms of obtaining state support by industrial enterprises:

  • After 2008-2009 crisis as a result of the state resources compression there was a significant reduction in the state support of industrial enterprises in Russia, while there was a concentration of support at enterprises with lobbying resources (members of business associations and firms with state capital in the ownership).

  • After 2014-2015 crisis the extent of state support of industrial enterprises has recovered almost to the 2008-2009 pre-crisis level. There are also signs of strengthening of the “model of exchange”, as well as sustainable support for enterprises that make large investment.

The analysis of the connection between absorption capacity, intercompany relations and the competitiveness of Russian firms conducted allowed us to make the following conclusions:

  • Intercompany partnerships are not quite widespread among Russian manufacturing companies, and are mainly based on vertical cooperation.

  • Companies established in the Soviet period have strong ties with suppliers, but are much less innovative and usually export basic manufacturing goods with relatively low added value.

  • The internal characteristics of firms established in the Soviet period are not connected to whether they have strategic partnerships, unlike firms created after 1991.

  • The presence of partnerships in R&D for manufacturing enterprises is positively and statistically significantly related to the share of employees in R&D only in case of firms created during the Soviet period.

In the framework of the data collection project to analyze the political and economic risks of doing business in Russia and China in 2019 the data on all participants in the Forbes Russia rating for 2004–2018 was collected and a database for further analysis was created.

Additional comparative analysis of the cases of the agricultural development in Voronezh and Belgorod regions focused on the governance models and the role of the leader showed the following:

  • The leadership factor is of particular importance in explaining the success of agricultural development in the regions analyzed.

  • The main factors of governance effectiveness include a long-term vision of the future for the region, a complex approach combining the achievement of social and economic goals, infrastructure development, attracting investors and financial support for the target sector.

  • Governance model in Belgorod region is characterized by “hard” authoritarian rule, building of personal contacts with business, and elements of the local “crony capitalism”. This model raises questions of sustainability in the case of a change of its leader.

  • Governance model in Voronezh region is characterized by “soft” authoritarianism, reliance on institutional contacts with business, in particular through business associations, the absence of “personal business interests” of the governor (that makes the business less dependent on the personality of the region’s leader), as well as the development of a broader “social base” in the business community.

Publications:


Fedyunina A., Averyanova Y. Import and export of high-tech products in Russian manufacturing companies // Russian Journal of Economics. 2019. Vol. 5. No. 2. P. 199-210. doi
Макаров С. А., Абзалилова Л. Р. Институциональные и организационные условия развития инноваций в российском регионе: опыт Республики Татарстан // Вестник Санкт-Петербургского университета. Серия 8. Менеджмент. 2019. Т. 18. № 3. С. 448-480. doi
Жиганов А. В., Юданов А. Ю. Быстрорастущие компании в России: влияние аффилированности на факторы роста // Российский журнал менеджмента. 2019. Т. 17. № 3. С. 287-308. doi