Working Paper No. 112 (October 2010)

GOVERNANCE STRUCTURES IN RUSSIAN MANUFACTURING: ASSESSMENT USING SAMPLE SURVEY DATA

Summary:

The analysis of governance structures in Russian manufacturing does not only enable exploring the industrial organization and upgrading of companies, but also brings forefront the transaction costs faced by market participants. From this perspective, it is important to examine Russian industries, since models of organizational structure have been developing in Russia only within the last 20 years, under the influence of transaction costs associated with the transition economy.
Despite the importance of governance structures within the framework of analysis of markets, competition, and inter-firm cooperation in transition economy, the model of Russian organizational structure has been studied insufficiently. The main objective of this work is to fill the gaps in studies of alternative governance mechanisms in Russian industries, and to review organization and behavior of enterprises as a part of hierarchical, market, and hybrid models. The empirical analysis is based on the data obtained from interviews of Russia's mid-sized manufacturing enterprises.
Preliminary results show that, first, in contrary to expectation, hierarchical governance does not prevail in the manufacturing industries, and second, governance structures affect organization of corporate control, willingness to price- and non-price competition, investment decisions, incentives and possibilities to upgrade and also the assessment of contract risk and contract protection in directions predicted by institutional theory and theory of value chain.

This page last modified Wednesday 27 October 2010.