The Politics of Russian Enterprise Reform: Insiders, Local Governments, and the Obstacles to Restructuring

Russia and other countries in the Commonwealth of IndependentStates that have implemented voucher privatization programshave to account for the puzzling behavior of insiders—manager-owners—who,in stripping assets from the firms they own, appear to be stealingfrom one pocket to fill the other. This article suggests thatasset stripping and the absence of restructuring result frominteractions between insiders and subnational governments ina particular property rights regime, in which the ability torealize value is limited by uncertainty and illiquidity. Asthe central institutions that govern the Russian economy haveceded their powers to the provinces, regional and local governmentshave imposed a variety of distortions on enterprises to protectlocal employment. To disentangle these vicious circles of control, this articlesconsiders three sets of institutional changes:; adjustmentsto the system of fiscal federalism by which subnational governmentswould be allowed to retain tax revenues generated locally; legalimprovements in the protection of property rights; and the provisionof mechanisms for restructuring and ownership transformationin insider-dominated firms. The aim of these reforms would beto change the incentives that local governments, owners, andinvestors face; to convince subnational governments that a moresustainable way of protecting employment lies in protectinglocal investment; to raise the cost of theft and corruptionby insiders and local officials; and to allow investors to acquirecontrolling stakes in viable firms.      

The empirical link between export dispersion and export performance: A contingency-based approach

Practitioners and scholars point out that firms are increasingly dispersing their capabilities across organizational functions. However, it is not clear whether all forms of dispersion, of any function, result in the same consequences. This study initiates investigation into the link between the cross-functional dispersion of influence on export marketing decisions (export dispersion) and export performance. Drawing on data from a sample of 225 UK exporters, the findings support the argument that active participation of non-export functions in export-marketing decisions affects export success. However, those performance consequences are dependent on internal and external contingencies. Export dispersion is beneficial for export performance when the export customer environment is more turbulent and, simultaneously, the export technological environment is more stable and the firm has lower levels of export information sharing. In all other scenarios examined in this study, greater levels of concentration of export decision-making (i.e. lower levels of export dispersion) appear to be more beneficial for export performance. Our findings imply that the management of the firm’s level of export dispersion is a complex task, whereby the degree of export dispersion pursued needs to match external environmental and internal firm factors.     

Cumulative Discrete Choice

We present a discrete choice model in which a consumer's impression of each alternative is based on her memory of past experience with this choice, and is stochastically updated whenever the alternative is chosen. The consumer remembers a cumulative utility index per alternative, and, when an alternative is chosen, the index is updated by the addition of a random variable, interpreted as instantaneous utility. We prove that the frequencies of choice converge, with probability 1, to limit frequencies, which can be computed from the model's parameters.