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Russian Business Groups: Substitutes for Missing Institutions?

CEFIR Working Paper

16 Pages Posted: 20 Jun 2005 Last revised: 29 Mar 2013

Natalya Volchkova

New Economic School (NES); Center for Economic and Financial Research (CEFIR)

Date Written: December 1, 2012

Abstract

Numerous evidence demonstrate that firms affiliated with business groups in emerging markets outperform their independent counterparts. One of the proposed explanations for such a phenomenon is the more advanced groups' internal markets structure compared to the rest of the economy. In this paper we test the hypothesis that internal capital markets within Russian business groups overcome the liquidity constraints problem widely spread outside groups. Our findings indicate that even if the groups' internal capital markets do exist in Russian business groups, their efficiency is rather doubtful and the access to external financing by firms affiliated with the groups is constrained.

Keywords: Business groups, transition economy, cash sensitivity to cash

JEL Classification: G32, L22

Suggested Citation

Volchkova, Natalya, Russian Business Groups: Substitutes for Missing Institutions? (December 1, 2012). CEFIR Working Paper. Available at SSRN: https://ssrn.com/abstract=744465 or http://dx.doi.org/10.2139/ssrn.744465

Natalya Volchkova (Contact Author)

New Economic School (NES)

100A Novaya Street
Moscow, Skolkovo 143026
Russia

Center for Economic and Financial Research (CEFIR) ( email )

47 Nakhimovsky Prospect, Office #720
117418 Moscow
Russia
+7-095-332 4083 (Phone)

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