corporations

Despite the prolonged economic recovery in 1999-2008, investment by Russian corporations in productive capacity was low and deficient in quality. Eichner's model of megacorp gives an insight into investment behaviour of Russian corporations due to its emphasis on indivisibility of investment decision, pricing and distribution of income between profits and wages. The typical Russian corporation is characterised by inseparability of ownership and management due to largely informal control of big insiders over enterprises. The groups, dominating over Russian corporations, seek to maximise the short-term rent. Along with a number of intra-firm conflicts this undermines both the supply of and the demand for investment funds.