Russia's Virtual Economy

Gaddy, Clifford G.; Ickes, Barry W.

doi:10.2307/20049050

Cited by 278 publications

(142 citation statements)

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“…Although Russia's formal corporate governance codes on paper are comparable to OECD standards, its formal institutions are ineffective due to lack of enforcement and a gap between the "virtual economy" (Maddy & Ickes, 1998) reflected in official statistics and company reports and reality. In practice, the concentrated financial industrial groups (FIGs) owned by so-called "oligarchs" (Estrin, Poukiakova, & Shapiro, 2009) have been rent-seeking and stifling of entrepreneurship (Aidis, Estrin, & Mickiewicz, 2008) and have conflicting aims with the formal rules of the legal framework and institutions.…”

Section: Russiamentioning

confidence: 99%

The role of informal institutions in corporate governance: Brazil, Russia, India, and China compared

2010

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This paper argues that the role of informal institutions as well as formal ones is central to understanding the functioning of corporate governance. We focus on the four largest emerging economies: Brazil, Russia, India, and Chinacommonly referred to as the BRIC countries. Our analysis is based on the Helmke and Levitsky framework of informal institutions and focuses on two related aspects of corporate governance: firm ownership structures and property rights; and the relationship between firms and external investors. We argue that for China and some states of India, "substitutive" informal institutions, whereby informal institutions substitute for and replace ineffective formal institutions, are critical in creating corporate governance leading to enhanced domestic and foreign investment. In contrast, Russia is characterized by "competing" informal institutions whereby various informal mechanisms of corporate governance associated with corruption and clientelism undermine the functioning of reasonably well set-out formal institutions relating to shareholder rights and relations with investors. Finally Brazil is characterized by "accommodating" informal institutions which get around the effectively enforced but restrictive formal institutions and reconcile varying objectives that are held between actors in formal and informal institutions.

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Section: Russiamentioning

confidence: 99%

The role of informal institutions in corporate governance: Brazil, Russia, India, and China compared

2010

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“…The most visible consequence of failing markets is the widespread use of barter in several successor states of the former Soviet Union (Gaddy and Ickes 1998, Commander and Momsen 1999, Seabright 2000. Yet it also affects international businesses with the transition economies.…”

Section: From Plan To Market: Change Of Co-ordination Mechanismsmentioning

confidence: 99%

International Business Research on Transition Economies

Meyer¹

2001

Oxford Handbook of International Business

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Focuses on challenges faced by businesses in the transition context, drawing on research beyond the main business journals. First, the microeconomic aspects of economic transition are summarized, taking the development of new institutions as starting points as they set the stage for developments in the enterprise sphere. Next, multinational enterprises entering the region are discussed, considering their motives, and their strategies for dealing with the specific context. Lastly, some managerial challenges are addressed that arise for multinational enterprises operating in the region.

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“…We conjecture that the behavior in the forest sector is basically dictated by the logic of "the virtual economy" as described by Gaddy and Ickes (1998a). In line with this theory, the main reason why the forest sector does not seem to move towards a market economy, i.e., why firms have not yet restructured in order to shorten their distance to the market, is that the virtual economy provides an incentive structure which, in fact, discourages managers to do so.…”

Section: Market Building and The Virtual Economymentioning

confidence: 97%