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State-owned enterprises in the Russian market: Ownership structure and their role in the economy

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  • Abramov, Alexander
  • Radygin, Alexander
  • Chernova, Maria
Abstract
This article analyzes the ownership structure of state-owned companies and their role in the Russian economy. Using a sample of 114 of the largest Russian companies, we estimated direct and indirect state participation as a percentage of shareholdings for direct and indirect federal property during the time period of 2006–2014. We used two methods to estimate the role of state-owned enterprises (SOEs), which allowed us to compare our results with OECD and Rosstat statistics for a broader sample of Russian companies owned by the public sector. This study revealed a decline in SOEs’ share in the capitalization of the Russian stock market and a slight increase in their share of total revenues and employment. The results indicated that public SOEs demonstrated significantly higher productivity compared to non-public SOEs and private companies had a distinct advantage in productivity compared with public SOEs. Despite the significant advantages in productivity of private companies over the SOEs, over a 9-year period, we observed that this gap narrowed. This may be due to conditions of high financial volatility and stagnation of the economy that result in certain advantages for SOEs in terms of access to sources of long-term funding and other forms of state support. However, SOEs with indirect state control experienced a rapid growth in revenue and productivity compared to other firms. This may indicate the presence of a specific stock selection mechanism for transferring more effective SOEs from direct state ownership to indirect control as an alternative to privatization.

Suggested Citation

  • Abramov, Alexander & Radygin, Alexander & Chernova, Maria, 2017. "State-owned enterprises in the Russian market: Ownership structure and their role in the economy," Russian Journal of Economics, Elsevier, vol. 3(1), pages 1-23.
    • Handle: RePEc:eee:rujoec:v:3:y:2017:i:1:p:1-23
    DOI: 10.1016/j.ruje.2017.02.001
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    References listed on IDEAS

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    1. A. Kudrin & E. Gurvich., 2014. "A New Growth Model for the Russian Economy," VOPROSY ECONOMIKI, N.P. Redaktsiya zhurnala "Voprosy Economiki", vol. 12.
    2. Hans Christiansen, 2011. "The Size and Composition of the SOE Sector in OECD Countries," OECD Corporate Governance Working Papers 5, OECD Publishing.
    3. Sprenger, C., 2010. "State Ownership in the Russian Economy. Part 1. Its Magnitude And Sectoral Distribution," Journal of the New Economic Association, New Economic Association, issue 6, pages 120-140.
    4. Radygin, Alexander & Entov, Revold, 2013. ""Fundamental" theorem of privatization: ideology, evolution, practice," Ekonomicheskaya Politika / Economic Policy, Russian Presidential Academy of National Economy and Public Administration, pages 7-45, December.
    5. Radygin, Alexander & Simachev, Yury & Entov, Revold, 2015. "The state-owned company: “State failure” or “market failure”?1," Russian Journal of Economics, Elsevier, vol. 1(1), pages 55-80.
    6. International Monetary Fund, 2014. "Russian Federation: Fiscal Transparency Evaluation," IMF Staff Country Reports 2014/134, International Monetary Fund.
    7. Chernykh, Lucy, 2008. "Ultimate ownership and control in Russia," Journal of Financial Economics, Elsevier, vol. 88(1), pages 169-192, April.
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    Cited by:

    1. Becker, Torbjörn, 2019. "Russia’s macroeconomy—a closer look at growth, investment, and uncertainty," SITE Working Paper Series 49, Stockholm School of Economics, Stockholm Institute of Transition Economics.
    2. Indārs, Edgars Rihards & Savin, Aliaksei & Lublóy, Ágnes, 2019. "Herding behaviour in an emerging market: Evidence from the Moscow Exchange," Emerging Markets Review, Elsevier, vol. 38(C), pages 468-487.
    3. Panibratov, A. & Klishevich, D., 2018. "Internationalization of the State-Owned Enterprises: Evidence from Russia," Working Papers 15116, Graduate School of Management, St. Petersburg State University.
    4. Ahn, Daniel P. & Ludema, Rodney D., 2020. "The sword and the shield: The economics of targeted sanctions," European Economic Review, Elsevier, vol. 130(C).
    5. Walheer, Barnabé & He, Ming, 2020. "Technical efficiency and technology gap of the manufacturing industry in China: Does firm ownership matter?," World Development, Elsevier, vol. 127(C).
    6. Sohag, Kazi & Sokhanvar, Amin & Belyaeva, Zhanna & Mirnezami, Seyed Reza, 2022. "Hydrocarbon prices shocks, fiscal stability and consolidation: Evidence from Russian Federation," Resources Policy, Elsevier, vol. 76(C).
    7. Grzegorz Kwiatkowski & Marlena Gołębiowska & Jakub Mroczek, 2023. "How much of the world economy is state‐owned? Analysis based on the 2005–20 Fortune Global 500 lists," Annals of Public and Cooperative Economics, Wiley Blackwell, vol. 94(2), pages 659-677, June.
    8. Taghizadeh-Hesary, Farhad & Yoshino, Naoyuki & Kim, Chul Ju & Mortha, Aline, 2019. "A Comprehensive Evaluation Framework on the Economic Performance of State-Owned Enterprises," ADBI Working Papers 949, Asian Development Bank Institute.
    9. Ararat, Melsa & Claessens, Stijn & Yurtoglu, B. Burcin, 2021. "Corporate governance in emerging markets: A selective review and an agenda for future research," Emerging Markets Review, Elsevier, vol. 48(C).
    10. Yiming Zhuang & Younggeun Lee & Xinyue Chang & Renee B. Kim, 2020. "Entrepreneurial orientation and corporate social responsibility performance: An empirical study of state‐controlled and privately controlled firms in China," Corporate Social Responsibility and Environmental Management, John Wiley & Sons, vol. 27(1), pages 383-392, January.
    11. A. Abramov & A. Radygin & M. Chernova & R. Entov., 2017. "State ownership and efficiency characteristics," VOPROSY ECONOMIKI, N.P. Redaktsiya zhurnala "Voprosy Economiki", vol. 4.
    12. Garanina, Tatiana & Kim, Oksana, 2023. "The relationship between CSR disclosure and accounting conservatism: The role of state ownership," Journal of International Accounting, Auditing and Taxation, Elsevier, vol. 50(C).
    13. Iwasaki, Ichiro & Ma, Xinxin & Mizobata, Satoshi, 2022. "Ownership structure and firm performance in emerging markets: A comparative meta-analysis of East European EU member states, Russia and China," Economic Systems, Elsevier, vol. 46(2).
    14. Yustinus Budi Hermanto & Lusy Lusy & Maria Widyastuti, 2021. "How Financial Performance and State-Owned Enterprise (SOE) Values Are Affected by Good Corporate Governance and Intellectual Capital Perspectives," Economies, MDPI, vol. 9(4), pages 1-13, September.
    15. Zemtsov, S. & Chernov, A., 2019. "What High-Tech Companies in Russia Grow Faster and Why?," Journal of the New Economic Association, New Economic Association, vol. 41(1), pages 68-99.

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    More about this item

    Keywords

    state ownership; state-owned enterprises; privatization; capitalization; private companies; direct ownership; indirect ownership;
    All these keywords.

    JEL classification:

    • B20 - Schools of Economic Thought and Methodology - - History of Economic Thought since 1925 - - - General
    • D20 - Microeconomics - - Production and Organizations - - - General
    • D60 - Microeconomics - - Welfare Economics - - - General
    • G38 - Financial Economics - - Corporate Finance and Governance - - - Government Policy and Regulation
    • H82 - Public Economics - - Miscellaneous Issues - - - Governmental Property
    • H83 - Public Economics - - Miscellaneous Issues - - - Public Administration
    • K40 - Law and Economics - - Legal Procedure, the Legal System, and Illegal Behavior - - - General
    • L30 - Industrial Organization - - Nonprofit Organizations and Public Enterprise - - - General
    • P20 - Political Economy and Comparative Economic Systems - - Socialist and Transition Economies - - - General

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