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TERRA ECONOMICUS

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  • Political connections of top entrepreneurs in the resource sector of the Russian economy: From qualitative analysis to quantitative studies

Political connections of top entrepreneurs in the resource sector of the Russian economy: From qualitative analysis to quantitative studies


TERRA ECONOMICUS, , Vol. 21 (no. 4),

We provide a quantitative assessment of the political connections of top entrepreneurs in the resource sectorof the Russian economy. The study applies the methodology of New Political Economy. Top entrepreneursare considered as economic actors pursuing their interests not only on economic but on political marketsas well. Political actors, represented by political and administrative decision-making persons, are motivatedboth by “public” and “private” goals when interacting with the representatives of “big business”. Commonpractice shows that running any serious business in the resource sector without political connections isalmost impossible. This is about maximizing current commercial results as well as increasing the value ofassets in the long term. We reveal various forms that political connections take in the countries with differentinstitutional environments, along with the mechanisms through which firms benefit from them. Politicalconnections matter not only in low- and lower-middle-income economies, but also in high-income countries.Our analysis involves data on private entrepreneurs from ferrous and non-ferrous metallurgy, oil and gasproduction, chemical industry, woodworking and coal mining. The results indicate that although politicalconnections have a positive effect on asset value, but this effect does not differ across industries. In otherwords, there is no reason to assert that they play a greater role in the resource sector than in the non-resourcesector. This result can be explained with the fact that in Russia the running of any big business is impossiblewithout political connections. The crucial factor is the size of the business and not its industry affiliation.
Citation: : Levin S.N., Sablin K.S., Kislitsyn D.V. (2023). Political connections of top entrepreneurs in the resource sector of the Russian economy: From qualitative analysis to quantitative studies. Terra Economicus 21(4), 6–24 (in Russian). DOI: 10.18522/2073-6606-2023-21-4-6-24
Acknowledgment: The article is supported by Russian Science Foundation grant № 22-28-00717 «Political connections of top entrepreneurs and enclaves of wealth building in the resource sector of the Russian economy»


Keywords: Russian economy; resource sector; top entrepreneurs; political connections; qualitative analysis; quantitative studies

JEL codes: O43; P51

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Publisher: Southern Federal University
Founder: Southern Federal University
ISSN: 2073-6606