To read this content please select one of the options below:

Small family business in Russia: formal or informal?

Alexander Chepurenko (Department of Sociology, Higher School of Economics, National Research University, Moscow, Russian Federation) (Centre of Complex Social Research, Institute of Sociology of the Russian Academy of Sciences, Moscow, Russian Federation)

International Journal of Sociology and Social Policy

ISSN: 0144-333X

Article publication date: 14 August 2018

Issue publication date: 17 August 2018

473

Abstract

Purpose

The purpose of this paper is to deal with informal entrepreneurial activity of micro and small family businesses in the specific transitional environment.

Design/methodology/approach

The paper uses two cases – an informal micro business (“marginal” family business), and a formal retail small firm (“simpleton” family firm), respectively, of a panel conducted in 2013–2015 in Moscow.

Findings

First, the real distribution of responsibilities between family members is informal; it relies more on interpersonal trust and “common law.” Second, exactly the ease of governing such trust-based businesses for the founders’ generation sets limits of succession of small-scale family businesses. Third, as trust in the state is very low, the policy of Russian authorities to quickly force informal entrepreneurs to become legalized is substantially wrong; the results would be either a transformation of “simpleton” into “marginal” businesses or quitting business.

Research limitations/implications

Research limitations of the study are the number of observations and the localization of the panel only in the capital of Russia.

Practical implications

The fundamental failure of Russian State policy toward small-scale family businesses is its attempt to convince “marginal” to formalize and to oppress “simpleton” family businesses pushing them into informality. In fact, it should be designed vice versa: tolerate “marginal” businesses and let them to “live and die” while shaping a friendly environment for “simpleton” family firms.

Originality/value

The paper argues that the most important facet of informality in small family entrepreneurship is the informal property rights and governance duties’ distribution among the family members.

Keywords

Acknowledgements

The research was enabled due to the financial support by the Centre of Fundamental Research of the National Research University – Higher School of Economics Moscow.

Citation

Chepurenko, A. (2018), "Small family business in Russia: formal or informal?", International Journal of Sociology and Social Policy, Vol. 38 No. 9/10, pp. 809-822. https://doi.org/10.1108/IJSSP-04-2017-0046

Publisher

:

Emerald Publishing Limited

Copyright © 2018, Emerald Publishing Limited

Related articles