Abstract
Many companies operating on different industrial markets have strong incentives to coordinate and integrate their activities with other firms. Forms and methods of cooperation could differ and include such variants as full integration through M&A deals, long term contracts, business associations, unions etc. In each case firms obtain advantages comparing with autonomous operating. However any coordination is related to threats to the interests of single participants, potential contradictions could be serious. This paper deals with business associations (BA). BA could be easily found at most Russian industrial markets. Some of them were inherited from Soviet economy; they operate as parts of huge administrative system. At the same time new emerging markets generated various types of new BA. Very often firms decide to join several BA. The relationship between firm’s membership in BA and its profitability and market power is not obvious.
Our main objectives are: 1) to identify the forms of business associations which are typical for current state of Russian economy; 2) to describe the role which business associations play within industrial markets’ structure; do they help to improve competitive position of single firms. .
Empirical part is presented by various monitoring projects implemented by government and independent agencies. The data of questionnaire and detailed interviews with representatives of some businesses were used also.
Research methodology is based on common approach to the industrial market structure analysis. Key factors of market structure are determined. Main attention is paid to firms’ concentration, leadership and market power. We study the type of relationship between firm’s participation in BA and different characteristics of its background and current performance.
Several examples of industrial markets were studied; lease market was analyzed in a more detailed way.
The results show that most of Russian industrial markets are characterized by the development of BA. Most of market leaders take part in several BA on local, regional and country level. . It is interesting to note that some BA were very active during crisis and after crisis period. Actually they solved serious problems and regulated relations between market agents.
Conclusion In general BA play important role on Russian industrial markets and present a part of civil society. We suggest that the influence of BA on firms’ performance will increase and they will provide an effective instrument of real assistance to industrial companies.