Table Of ContentOrganization and Development of Russian Business
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Organization and
Development of Russian
Business
A Firm-Level Analysis
Edited by
Tatiana Dolgopyatova, Ichiro Iwasaki,
and Andrei A. Yakovlev
Selection and Editorial matter © Tatiana Dolgopyatova, Ichiro Iwasaki and
Andrei A. Yakovlev 2009
Individual chapters © Contributors 2009
Softcover reprint of the hardcover 1st edition 2009 978-0-230-21728-7
All rights reserved. No reproduction, copy or transmission of this
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in accordance with the Copyright, Designs and Patents Act 1988.
First published 2009 by
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ISBN 978-1-349-30387-8 ISBN 978-0-230-24949-3 (eBook)
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Library of Congress Cataloging-in-Publication Data
Organization and development of Russian business : a firm-level analysis /
edited by Tatiana Dolgopyatova, Ichiro Iwasaki, and Andrei A. Yakovlev.
p. cm.
Includes bibliographical references and index.
ISBN 978-1-349-30387-8 (alk. paper)
1. Corporate governance – Russia (Federation) I. Dolgopyatova, Tatiana,
1951– II. Iwasaki, Ichiro. III. Yakovlev, Andrei A.
HD2741.O74 2009
338.60947—dc22 2009013790
10 9 8 7 6 5 4 3 2 1
18 17 16 15 14 13 12 11 10 09
Contents
List of Tables vii
List of Figures xi
Acknowledgments xii
Notes on the Contributors xiii
List of Abbreviations xiv
Introduction 1
Tatiana G. Dolgopyatova, Ichiro Iwasaki, and Andrei A. Yakovlev
1 The Emergence of Russian Corporations: From
the Soviet Enterprise to a Market Firm 12
Tatiana G. Dolgopyatova, Ichiro Iwasaki, and Andrei A. Yakovlev
Part I Ownership, Internal Control, and
Management System
2 Stock Ownership and Corporate Control 39
Tatiana G. Dolgopyatova
3 Legal Form of Incorporation 62
Ichiro Iwasaki
4 The Structure of Corporate Boards 89
Ichiro Iwasaki
5 Impact of Corporate Governance and Performance on
Managerial Turnover 122
Naohito Abe, and Ichiro Iwasaki
6 Management Team and Firm Restructuring 148
Victoria V. Golikova
Part II Business Integration and Its Impacts on
Corporate Governance
7 Organizational Patterns of Corporate Control and
Business Integration 173
Tatiana G. Dolgopyatova
8 Corporate Governance and Decision-Making in Business Groups 195
Svetlana B. Avdasheva
v
vi Contents
9 Impact of Business Integration on Corporate
Restructuring and Performance 213
Svetlana B. Avdasheva
Part III The Role of External Agents in
Corporate Governance
10 The Banking Sector and Corporate Finance 235
Fumikazu Sugiura
11 Business Associations: Incentives and Benefits from
the Viewpoint of Corporate Governance 258
Victoria V. Golikova
12 State–Business Relations and Improvement of
Corporate Governance 284
Andrei A. Yakovlev
Conclusions 307
Tatiana G. Dolgopyatova, Ichiro Iwasaki, and Andrei A. Yakovlev
Appendix: Outline of the Japan–Russia Joint Enterprise Survey 312
Tatiana G. Dolgopyatova, and Ichiro Iwasaki
Index 321
Tables
I.1 Selected macroeconomic indicators of the Russian
transition economy, 1992–2007 2
1.1 Chronology of enterprise reforms and related events in
the USSR and Russia, 1986–2007 17
1.2 Privatization of state-owned enterprises and
privatization revenue in Russia, 1993–2007 23
2.1 Intra-corporate disputes in 2001–2004 at different levels of
ownership concentration 44
2.2 A verage percentage of ordinary shares owned by type of
shareholder at different levels of ownership concentration 45
2.3 C urrent economic situation of enterprises at different levels of
ownership concentration 49
2.4 C oefficients for the variable “concentration of ownership” in
regression models 51
2.5 Ownership and control in JSCs at different ownership and
control concentrations 54
2.6 Influence of board of directors on corporate decision-making at
different levels of ownership concentration 54
2.7 S tructure of board of directors at different levels of capital
concentration 56
3.1 Differences in the legal framework between open and
closed joint-stock companies in Russia 66
3.2 Comparative advantages of open and closed companies
over an alternative corporate form of joint-stock company 70
3.3 Most important reason for being in the current corporate form 71
3.4 C omparison between open and closed joint-stock companies
regarding the ownership structure, capital demand and supply
constraints, relationship with business groups, past policies on
company start-ups, and company size 77
3.5 Probit regression analysis of the corporate-form choice model 80
4.1 Descriptive statistics on board size and number of
directors by their attributes of 730 surveyed firms 95
4.2 I nternational comparison of board size and
proportion of outsider directors 96
4.3 Correlation matrix of board components 101
4.4 Theoretical predictions of the impacts of firm
organization and business activities on board components 107
vii
viii Tables
4.5 Definition, descriptive statistics, and data source of
variables used in the empirical analyses and correlation
coefficients with board components 110
4.6 2SLS system estimates of endogenous board formation 112
5.1 Studies of managerial turnover in Russian firms 126
5.2 Results from vote-counting analysis of the impact of
different types of owners and changes in ownership
structure on CEO turnover 128
5.3 Descriptive statistics of independent variables by
company group in terms of turnover type 134
5.4 Logit regression analysis of the impacts of corporate
governance and performance on CEO turnover 136
5.5 M ultinomial probit regression analysis of the impacts of
corporate governance and performance on managerial
turnover taking its magnitude into consideration 138
5.6 Multinomial probit regression analysis of the impacts of
corporate governance, corporate performance, and
internal conflict on managerial turnover taking its
magnitude into consideration 141
6.1 R ecruiting sources of general directors at independent
enterprises and in HCGs 152
6.2 Characteristics of managerial skills and experience by
different status of company location 153
6.3 Change of general director/board chairman at independent
enterprises and HCGs depending on changes of
main company shareholders in 2001–2004 155
6.4 Change of middle-level managers in JSCs in which the general
director was changed by the status of the current director 157
6.5 Logistic regression analysis of the propensity of
proactive restructuring 162
7.1 Ownership and management configuration at affiliated
companies of holding company groups 176
7.2 Characteristics of intra-corporate control 178
7.3 Turnover of CEOs, boards of directors, and
its chairs in 2001–2004 179
7.4 C omparison of JSCs with separation or combination of
ownership and management 184
7.5 Logistic regressions for shareholder choice of separated
ownership and management 186
7.6 L ogistic regressions for shareholder choice of separated
ownership and management and corporate integration 189
8.1 E nterprises coordinating strategic decisions with
outside stakeholders 203
Tables ix
8.2 Ownership and management in JSCs depending on
their affiliation with BGs 204
8.3 Boards of directors in subsidiaries of BGs in regulated and
nonregulated industries 207
9.1 Impact of membership in business groups on
restructuring activity 221
9.2 I mpact of membership in business groups on
performance indicators 224
9.3 T otal factor productivity in subsidiaries of BGs compared with
independent enterprises (Cobb–Douglas production
function, output in 2004) 226
10.1 Financing sources of fixed investment 237
10.2 Recent Sberbank financial undertakings 240
10.3 Asset structure of Sberbank 244
10.4 Definitions, descriptive statistics, and sources of
variables used in the empirical analysis 249
10.5 Results of regression analysis on enterprises with no
external borrowings 250
10.6 Certain characteristics of enterprises depending on main
source(s) of external finance 251
10.7 Results of regression analysis on enterprises with
borrowings from Sberbank 253
11.1 Characteristics of companies: Members and
nonmembers of business associations 263
11.2 Indicators of financial standing of joint-stock companies and
membership in business associations 264
11.3 Types of support rendered to authorities and aid
through various channels depending on membership in
business associations 265
11.4 Benefits for members of associations from
the establishment of steady contacts with authorities 266
11.5 L ogistic regression analysis of the determinants of
participation in business associations 270
11.6 Logistic regression analysis of probability to obtain
financial and organizational support from the state authorities 274
11.7 Utility of business associations and their contribution to
the establishment of standards and rules of conduct of
business, evaluated by respondents in 2002 and 2005 276
11.8 Evaluation of contribution of NGBOs to the solution of
important problems of the business community by
the respondent joint stock companies 277
12.1 Construction of the CG_IDX 290
12.2 Distribution of firms depending on the value of the CG_IDX 290
