STATE-BUSINESS RELATIONS AND PARTICIPATION OF FIRMS IN PUBLIC PROCUREMENT IN RUSSIA: AN EMPIRICAL STUDY.

In this paper, we regard public procurement as an instrument used by the government for indirect support of enterprises. In this context, we have investigated the place that public procurement occupy in state-business interrelations. Using data from a large survey of Russian manufacturing enterprises conducted in 2009 we show that in Russia public procurement cannot be regarded as a component in the system of exchanges, and the extent of combination between direct and indirect support depends on the level of government. At the federal level direct and indirect instruments of government support complement each other. At the regional and local levels the effect of mutual complementation can be observed only in relations with firms, which conceal information about their ownership structure and are supposedly affiliated with regional and local bureaucrats. In relations with other firms at regional and local levels direct and indirect support substitutes each other. [ABSTRACT FROM AUTHOR]