Studies Eastern European Markets
vientipalvelut
uutisia
tutkimuksia
oalvelut ja yritykset
Eastern European Markets
business news
Russia
Estonia
Latvia
Lithuania
Poland
Trade StationFinland
Business Finland
Trade Service Companies

August 2007

Alexei V. Kuznetsov
PROSPECTS OF VARIOUS TYPES OF RUSSIAN TRANSITIONAL CORPORATIONS (TNCs)
Electronic Publications of Pan-European Institute 10/2007

Download the publication in PDF format.

Conclusions

The past four years have witnessed the rapid growth of Russian FDI outflows. Such strong internationalization of Russian companies astonishes many experts. Nevertheless I suppose the Russian investment expansion has not reached its peak. Many new Russian TNCs can appear in next few years. In fact, scientists underestimate the whole economic potential of Russia because the deep industrial decline during the Russian transformation of the 1990s. However many Soviet giants and new Russian firms have competitive advantages and their owners want to be global players.

Furthermore, modern Russian TNCs make up a very heterogeneous group. Indeed, some companies can internationalize not only due to their competitive advantages but thanks to their special features inherited from the Soviet past. I can see at least four various types of Russian TNCs:

1) successors of Soviet enterprises abroad;
2) “classic” TNCs;
3) TNCs arisen due to the “civilized” divorce of former Soviet republics;
4) pseudoTNCs.

The most widespread type is “classic” TNCs, however some famous Russian TNCs belong to other types (e.g., Vneshtorgbank, VimpelCom, UES of Russia, Novoship, etc.). However I suppose the majority of Russian TNCs will transform into “classic” TNCs. Nevertheless Russian “classic” TNCs can differ too. There are “classic” TNCs of developed countries and “classic” TNCs of developing countries. The first group consists of large companies organized on the base of famous Soviet plants (for instance, Lukoil, Norilsk Nickel, RusAl, Severstal, Evraz, OMZ and so on). They can make FDI worldwide according to various motives. The second group consists of new firms which are “children of liberal reforms”. Typical examples are telecom producer Sitronics, Conversbank, retailer Eldorado, sewing company Gloria Jeans, etc. Their investment expansion is usually limited because of the lack of experience and financial resources. They prefer to invest in the EU and the CIS, especially in neighbour countries. However such companies can demonstrate strategic asset seeking motives when they make modest FDI in other countries.

At the end I want to stress the necessity of changing the whole attitude to Russian TNCs. Foreign experts should divide real problems and false stereotypes. Russians should improve their business culture and elaborate the state support measures of national TNCs’ investment expansion which are adequate for market economy.

Download the publication in PDF format.


More information:
Pan-Eurooppa Instituutti
Rehtorinpellonkatu 3, 20500 TURKU
(02) 4814 560
http://www.tukkk.fi/pei

Compiler Trade Web Site: Tutkimuksia
Studies on emerging markets /Index
Tutkimukjsia / Hakemisto

 TERMS & CONDITIONS / KÄYTTÖOIKEUDET. © Oy Compiler Ab. All rights reserved.