Russian Firms in Transition: Champions, Challengers and Chaff

This paper evaluates the survival potential of Russian firms. First, a composite measure of survival potential is developed using select characteristics of the firm, the firm's management, and the market structure faced by the firm. The measure is applied to 51 Russian firms, based on in-depth interviews with top-level managers of manufacturing, trade and other organizations conducted in 1995 in Moscow, Volgograd, Rostov and Taganrog. Using arbitrarily assigned weights for each element in the composite measure and a straight scale for categorizing firm performance, ten percent of the firms emerge as champions, more than fifty percent emerge as chaff. Second, two different proxies are used as a measure of survival potential, and the relative importance of firm, management and market structure characteristics is estimated. The weights are adjusted in the composite measure to reflect the regression results. The results indicate that survival potential is not driven by ownership structure, firm size, or the presence of monopoly power.