Institutional Realities and Constraints on Change: The Case of SME in Russia

Abstract

This article presents the results of exploratory field research investigating the impact of the enabling institutional environment and internal firm capabilities in the information technology sector in St. Petersburg, Russia. Through a series of semi-structured interviews and confirmatory research through the UNDP and UNIDO, the study finds the emerging institutional environment remains weak, unpredictable and unstable, creating challenges for SMEs to contribute to the growth and development of the Russian economy.

Entrepreneurship and small businesses in Russia: a review of empirical research

“…Batjargal, 2007a). A qualitative approach was taken in only 4 papers (Bruton and Rubanik, 1997;Kapustkina et al, 2008;Molz et al 2009;Rogers, 2006). The reasons for selecting a particular analytical approach were poorly reported in most of the studies.…”

Suboptimal Size: Factors Preventing the Growth of Russian Small and Medium-Sized Enterprises

“…The aforementioned determinants, both demand and supply side, are relevant for all countries, however, in transitioning economies, their impact on growth and sometimes the vector of a business's development is determined by the features of the institutional environment. The body of empirical research on SME performance in developing economies found a robust relationship between firm performance and the quality of institutions [Aidis et al, 2008;Molz et al, 2009;Blagojevic, Damijan, 2013;Sharafutdinova, Kisunko, 2014;Yukhanaev et al, 2015;Volchek et al, 2013a,b;Wang, You, 2012;Krasniki, Desai, 2016;Welter, Smallbone, 2011]. However, the mechanism behind their interactions remains poorly studied.…”

“…The determinants of firm growth described above, such as supply-and demand-side factors, are still valid for firms operating within emerging economies. However, their effectiveness and the direction of their effect is often determined by the idiosyncrasies of the institutional environment [Marcelin, Mathur, 2015;Cuaresma et al, 2013;Volchek et al, 2013a,b;Molz et al, 2009;Dallago, 2000;Blagojevic, Damijan, 2013;Welter, Smallbone, 2011;Yukhanaev et al, 2015].…”

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“…The aforementioned determinants, both demand and supply side, are relevant for all countries, however, in transitioning economies, their impact on growth and sometimes the vector of a business's development is determined by the features of the institutional environment. The body of empirical research on SME performance in developing economies found a robust relationship between firm performance and the quality of institutions Molz et al, 2009;Blagojevic, Damijan, 2013;Sharafutdinova, Kisunko, 2014;Yukhanaev et al, 2015;Volchek et al, 2013a,b;Wang, You, 2012;Krasniki, Desai, 2016;. However, the mechanism behind their interactions remains poorly studied.…”

“…The determinants of firm growth described above, such as supply-and demand-side factors, are still valid for firms operating within emerging economies. However, their effectiveness and the direction of their effect is often determined by the idiosyncrasies of the institutional environment [Marcelin, Mathur, 2015;Cuaresma et al, 2013;Volchek et al, 2013a,b;Molz et al, 2009;Dallago, 2000;Blagojevic, Damijan, 2013;Yukhanaev et al, 2015].…”