Institutions, Networks and Entrepreneurship Development in Russia: An Exploration

26 Pages Posted: 16 Aug 2006

See all articles by Ruta Aidis

Ruta Aidis

University College London; University of Amsterdam - Faculty of Economics and Business (FEB)

Saul Estrin

London School of Economics & Political Science (LSE); Centre for Economic Policy Research (CEPR); IZA Institute of Labor Economics

Multiple version iconThere are 2 versions of this paper

Date Written: June 2006

Abstract

In this paper we explore the ways in which institutions and networks influence entrepreneurial development in Russia. By utilizing new Global Entrepreneurship Monitor (GEM) data collected in 2001, we investigate the effects of the weak institutional environment in Russia in terms of three dimensions: on the rate of productive entrepreneurial activity measured in terms of start-ups and existing business owners; on the characteristics of business owners; and on business financing. In addition, the analysis explores the effectiveness of Russia's informal networks for circumventing the weak institutional environment for business development. Our results indicate that Russia's business owners share many of the same characteristics as business owners in advanced western countries, though education is not associated with entrepreneurial activity. However, the main differences are in the sources of financing and the fact that relatively few individuals engage in productive entrepreneurial activity. Our results support the notion of the limited effectiveness of Russia's networks for supporting entrepreneurial activity in its weak institutional environment.

Keywords: Entrepreneurship, Institutions, Networks, Russia

JEL Classification: L14, M13, P36

Suggested Citation

Aidis, Ruta and Estrin, Saul and Estrin, Saul, Institutions, Networks and Entrepreneurship Development in Russia: An Exploration (June 2006). William Davidson Institute Working Paper No. 833, Available at SSRN: https://ssrn.com/abstract=924422 or http://dx.doi.org/10.2139/ssrn.924422

Ruta Aidis (Contact Author)

University College London ( email )

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London
United Kingdom

University of Amsterdam - Faculty of Economics and Business (FEB) ( email )

Roetersstraat 11
Amsterdam, 1018 WB
Netherlands
+ 31 20 525 4011 (Phone)
+ 31 20 525 4254 (Fax)

Saul Estrin

London School of Economics & Political Science (LSE) ( email )

Houghton Street
London, WC2A 2AE
United Kingdom

Centre for Economic Policy Research (CEPR)

London
United Kingdom

IZA Institute of Labor Economics

P.O. Box 7240
Bonn, D-53072
Germany

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