The rise and fall of financial-industrial groups: The genesis of Russian capitalism

The dissertation explains the processes of restructuring of economic organizations in Russia between 1991–1999, focusing on the interaction of organizational characteristics and changes in organizational environments. The dissertation research project examines three processes that profoundly reshaped the post-Soviet economic space: (1) the stagnation of post-Soviet enterprises and the emergence of industry-led financial-industrial groups (known by their Russian acronym—FPGs—financovo promyshlenye grupy); (2) the emergence of the private banking sector and the establishment of bank-led financial-industrial groups; and (3) the restructuring of the oil and gas sector and the development of the oil and gas financial industrial groups. The research examines the development of the three types of FPGs in the historical context of the 1991–1999 market reforms.; The three groups of FPGs represent three unique trajectories of organizational adaptation in response to a dramatic change of organizational-institutional environment. The research shows that like the majority of post-Soviet enterprises, most industry-led FPGs were deeply rooted in Soviet history and failed to successfully adapt to the post-Soviet economic environment. The bank-led and the oil and gas FPGs were much more successful and grew into Russia's largest oligopolies until 1998 when the majority of the bank-led FPGs collapsed as a result of the 1998 financial crisis. The oil and gas FPGs survived the crisis and continue to dominate Russia's economic landscape. The dissertation seeks to explain why the three groups of FPGs either stagnated, collapsed or expanded in the course of a decade of market reforms. In the pursuit of answers to this question, the project focuses on three broad-based research areas: (1) the construction and nature of the political and economic environment during the reform period; (2) the FPGs' organizational histories and internal resources and capacities for adaptation to this environment; and (3) the interaction between changing environmental opportunities and constraints and the internal resources and capacities of FPGs as a mechanism that shaped their evolution between 1991–1999. The dissertation highlights the dynamic through which changes in policies, ideologies, laws, state actions and market opportunities shape the action opportunities of differently endowed organizations.