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Identifier to cite or link to this item: https://hdl.handle.net/10086/15721

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Title
Economics of Corporate Form: Why Do Russian Firms Prefer to Be Closed Companies?
Creator
Creator Name
Iwasaki, Ichiro Iwasaki, Ichiro
岩﨑, 一郎 岩﨑, 一郎
イワサキ, イチロウ イワサキ, イチロウ
Affiliation
Affiliation Name
Hitotsubashi University
Editor
Contributor Name
Russian Research Center, Institute of Economic Research, Hitotsubashi University
Key Word
Russia
corporate form
corporate governance
organizational choice
JEL
D23
G34
K22
L22
P31
Abstract
In Russia, an overwhelming number of joint-stock companies (JSCs) choose to become closed companies despite the fact that this corporate form strays far from the primary nature of stock companies. Using the results of a Japan-Russia joint enterprise survey conducted in 2005, we examine a variety of factors as to why Russian stock companies select to become closed companies. Our empirical results suggest the following four factors encouraging many of Russian firms to be closed JSCs: (a) a widespread insider-dominating corporate ownership structure emerging as a result of the mass-privatization policy; (b) a strong orientation among managers toward closed corporate organization due to the underdeveloped capital and managerial markets; (c) slumping needs for corporate finance; and (d) insufficient financial support from local financial institutions. The empirical relationship between corporate form and ownership structure exists, even if we assume the endogeneity of the two elements.
Description
This paper was produced as a result of a Japan-Russia joint research project entitled “Corporate Governance and Integration Processes in the Russian Economy” launched by the Institute of Economic Research, Hitotsubashi University (Tokyo) and the Institute for Industrial and Market Studies, National Research University ? Higher School of Economics (Moscow). The research was financially supported by the Japan Securities Scholarship Foundation (JSSF) and grants-in-aid for scientific research from the Ministry of Education and Science of Japan (Nos. 16530149; 17203019; 21402025; 23243032). I also thank Naohito Abe, Tatiana G. Dolgopyatova and Andrei Yakovlev for their valuable comments and Jim Treadway for his editorial assistance. Needless to say, all remaining errors are mine.
Revised version; first published in December 2007
Publisher
Russian Research Center, Institute of Economic Research, Hitotsubashi University
Issued Date
2013-05
Language
English(eng)
Resource Type
technical report
Version Type
VoR
Is Part OfRelation -
Related Title
RRC Working Paper Series ; No. 3
Relation
Related Identifier
URI
  http://www.ier.hit-u.ac.jp/rrc/English/
ISSN
1883-1656
Number of Pages
24
Appears in Collections
RRC Working Paper Series
URL
https://hdl.handle.net/10086/15721