The Effects of a Politico-Economic Paradigm Shift
New Horizons in International Business series
Edited by Mai Thi Thanh Thai and Ekaterina Turkina
Chapter 10: Internationalization of Russian firms as institutional arbitrage: the case of Finland
In recent years, Russia has become an active player in the world economy. Its rank was eighth among world's top investor countries in 2012, and foreign acquisitions by large Russian multinational enterprises (MNEs) have become a common phenomenon (UNCTAD, 2013). The large multinationals, often with state ownership and investing in natural-resource based industries, are the most visible representatives of the Russian business abroad. Correspondingly, most academic research on the internationalization of Russian firms has focused on MNEs (see, for example, Kalotay and Sulstarova, 2010; Kuznetsov, 2011a). At the same time, smaller Russian firms, often embodied by their founder-entrepreneur, are increasingly exploring business opportunities through internationalization as well. In some cases, they follow the traditional model of firm internationalization, whereas in others, individual-level migration and firm-level internationalization processes are intertwined (for example, Pinsent Masons, 2012). Such non-traditional modes of the internationalization of Russian firms have, however, received scant research attention. This, we argue, is a gap that needs to be addressed to extend knowledge about the internationalization of Russian firms beyond the MNE context. In this chapter, we shed light on the internationalization of Russian firms of different sizes. Theoretically, we build on the institutional perspective to show how the peculiarities of the Russian business environment are manifested in the internationalization patterns in Russian firms.
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