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Russian Power and the State-Owned Enterprise

Alexander Libman, Randall W. Stone, Evgeny Vinokurov
(September 16, 2021)

Libman A., Stone R., Vinokurov E. (2021) Russian Power and State-Owned Enterprise. European Journal of Political Economy. Available online September 16, 20121. https://doi.org/10.1016/j.ejpoleco.2021.102122


• Russian firms as a case of multinationals from an authoritarian country.

• State-owned firms and the government as a case of reciprocal agency.

• Bimodal distribution of FDI in terms of host country's political constraints.

• Large SOEs more likely to invest in risky political environment.

• SOEs more likely to align their interests with Russia's foreign policy.


Russian firms are important political actors in the former Soviet Union, and we use data on their choices of locations for foreign investment to draw inferences about their strategies and degree of autonomy from the Russian state. We find evidence that a substantial share of Russian firms prefer risky investment climates, which we interpret as evidence of rent-seeking strategies. This pattern is most pronounced for large state-owned firms. State-owned firms are responsive to the Russian foreign policy agenda, while privately-owned firms appear to be more autonomous. The evidence suggests that Russia deploys state-owned firms to extend its influence and exerts influence to make their investments profitable.

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