Amanda Gregg (Middlebury College): The Births, Lives, and Deaths of Corporations in Late Imperial Russia
Understanding the birth, growth, and death of firms in the early stages of industrial development is a relatively unexplored area of economic history, yet these processes are at the heart of transitions to modern economic growth. Our paper investigates the competitiveness and financial development of the Imperial Russian economy by examining patterns of entry, exit, and persistence in the corporate sector. This analysis relies on a newly developed panel database of detailed annual balance sheet information from every active corporation (N > 2500) in the Russian Empire between 1899 and 1914. In our data, firms enter the corporate sector as brand-new firms or as partnerships newly transformed into corporations, and they exit when they shut down. We examine the variation in entry patterns across industries with different levels of profitability and competitiveness, document how new and newly transformed corporations evolved over their life cycles, and construct proportional hazard models to predict firm exits based on underlying balance sheet and governance characteristics. In addition, we examine heterogeneity in corporate entry and exit patterns by the nature of political connections held by corporate founders. Overall, our findings suggest a relatively high level of flexibility and competitiveness in the Imperial corporate sector, which belies any simplistic argument regarding institutional constraints on firm growth and development in the early stages of Russian industrialization. More broadly, these findings inform our understanding of firm dynamics in developing country settings.
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