The omnipresence of the state and its effect on the internationalization of companies: The Russian variety of state capitalism

Abstract

State capitalism has been a growing phenomenon since the early 2010s. This is especially the case in emerging markets, in which the state plays a viable and strong role. As it has become particularly prominent due to the international activities of stateowned enterprises (SOEs), state capitalism has been widely discussed in the international business literature. Scholars have emphasized the need to explore the various kinds of state capitalism and to advance our knowledge of its influence on the international activities of firms, beyond that it exerts on SOEs. We proposed the concept of state capitalism as embodied by an omnipresent state that influences the internationalization of both state-owned and private firms. Integrating institutional theory and agency theory, we examined the international activities of Russian SOEs and private firms over the 2013-2018 period and found state ownership and political connections to be the two mechanisms by which state capitalism in Russia can negatively affect the internationalization activities of Russian firms.