Enterprise Restructuring in Russia's Transition Economy: Formal and Informal Mechanisms

This paper examines the nature and scope of enterprise restructuring in Russia using two sources of firm-level data. The first involves a panel of over 2,000 civilian manufacturing firms in Moscow, Tver, Volgograd, Rostov, and Novosibirsk. The second involves data collected from a series of in-depth interviews conducted between 1994 and 1997 with top-level managers in 47 firms located in Moscow, Tver, Nizhny Novgorod, and Novosibirsk. The objective of the paper is threefold. First, we summarize the existing literature on enterprise restructuring, and evaluate the pros and cons of a number of restructuring measures that have been used in studies of privatized firms in Russia and other transition economies. Second, we apply two measures of enterprise restructuring to our data to investigate the extent of variation by industry, ownership structure, and location. Third, we examine in detail the question of whether barter enhances or impedes enterprise restructuring in Russia.