Industrial Associations As a Channel of Business-government Interactions in Imperfect Institutional Environment: the Russian Case

Andrei Yakovlev (Higher School of Economics)
Andrey Govorun (Higher School of Economics)

Abstract: International lessons from emerging economies suggest that business associations may provide an effective channel of communication between the government and the private sector in imperfect institutional environment. In this context, Russian experience is a matter of interest, because Russia was regarded for a long time as a striking example of state failures and market failures. Consequently, the key point of our study was a description of the role and place of business associations in the present-day Russian economy and their interaction with member firms and governments. Relying on the new survey data of 957 manufacturing firms we found that business associations are more frequently joined by larger companies, firms located in regional capital cities, and firms active in investment and innovation. By contrast, business associations tend to be less frequently joined by business groups’ subsidiaries and firms that were non-responsive about their respective ownership structures. Our regression analysis has also confirmed that business associations are a component of an “elite exchange”– although only on regional and local levels. Our results show that at present, business associations (especially the industry-wide and “leading” ones) consolidate the most active, advanced companies, act as collective representatives of their interests and can be regarded as a possible instrument for promotion of economic development.

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