State-owned enterprisesin the Russian market: Ownership structure and their role in the economy

Abstract

This article analyzes the ownership structure of companies with state participation and their role in the Russian economy. Using a sample of 114 largest companies we have estimated direct and indirect state participation as percentage of shareholdings which are in direct and indirect federal property in 2006-2014. We have used two methods for estimating the role of state-owned enterprises (SOEs), which allowed us to compare our results with those of OECD and Rosstat statistics for the broader sample of Russian companies in the public sector. This article reveals the decline of SOEs’ share in the capitalization of the Russian stock market as well as a slight increase of their share in total revenue and employment. The results show that public SOEs, demonstrate significantly higher productivity compared to non-public SOEs and private companies have a distinct advantage in productivity compared with public SOEs. Despite the significant advantages in productivity of private companies over the SOEs, over 9-year period we observed a reduction of this gap. This may be due to the fact that in conditions of high financial volatility and stagnation of the economy SOEs had certain advantages in terms of access to sources of long-term funding and other forms of state support. However, SOEs with indirect state control had a rapid growth in revenue and productivity in comparison with the rest of them. This may indicate the presence of a specific stock selection mechanism for transferring more effective SOEs from direct state ownership to indirect control as an alternative to privatization.