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    Bank of Finland, Rauhankatu 19 B, Helsinki

Dmitri Trifonov (Higher School of Economics): Political connections in Russian corporations: Quantitative evaluations and mechanisms

Abstract
The research focuses upon the problem of political connections in Russian corporations. Basing on the sample of 213 Russian corporations, the research is aimed to (1) provide quantitative evaluations of political connections in light of international evidences, and (2) to suggest explanations for the mechanisms of politicization. The paper shows that Russian corporations are highly politicized. In contrast to examples of other countries, geographical patterns and firm’s age do not affect the degree of political connectedness, when we talk about Russian corporations. A degree of political connectedness differs among industries, and regulated industries are more politically connected. The study shows that different industries tend to attract different categories of government officials, and the paper describes the patterns. The research shows statistically that SOEs and POEs in Russia should be considered separately in terms of political connections. Russian SOEs tend to be more politically connected in compare to POEs, and 79% of their politically connected directors carry out the functions of oversight and supervision. This represents a natural way to implement property rights of the Russian state which acts like a shareholder. Remarkably, politically affiliated directors are concentrated rather in parent companies than in subsidiary companies at SOEs, while POEs tend to show no statistically significant dependences in this regard. The paper suggests explanations for the presence of politically connected non-executives at POEs. Constituting only 21% of politically affiliated directors, executive directors show a tighter correlation with the indicator of stock market capitalization at SOEs, while those differences are statistically insignificant at POEs. 

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