Cooperation Between SMEs and Large Industrial Enterprises: Russian Case

Abstract

In the modern global economy, the system of functional cooperative relations that lead to the formation of hybrid structures – production networks has become actively spread. However, the strength and scale of cooperation are not uniform. Using the example of Russia, the authors consider the effectiveness of the production network of cooperation between small and medium-sized enterprises with large companies. We tested a number of hypotheses based on common ideas about the effects of cooperation. Empirical results make it possible to clarify the mechanism of formation and features of interfirm production chains in Russia. The “anchor” role of large enterprises with state participation as centers of cooperation formation is noted. In the course of the study, 14 enterprises were selected, distributed across key sectors of the Russian economy. Statistical and correlation analysis methods were used to evaluate the effects of cooperation. The results showed that the orders placed by large manufacturing enterprises with small and medium-sized enterprises increased over the period of 2015–2019. “Anchor” enterprises, as a rule, reduce the production localization degree. However, this does not have a significant impact on improving the profitability of their activities, and also does not depend on the share of state participation. Besides, placing orders with small and medium-sized enterprises does not allow them to reduce the number of employees. Many of the expected internalities that are characteristic of cooperative relations in developed countries are not reflected in the specifics of the Russian economy, or their manifestation is limited. The Russian experience clearly demonstrates the weakness of cooperative partnership, although with positive trends of change. There is a need to further improve the mechanisms for supporting small and medium-sized enterprises in the production sector, aimed at creating sustainable networks. The proposed approach can be applied to assess inter-firm production chains in other countries. A comparative study will determine the strength of the formation of production networks across countries, which will expand the understanding of the economic processes of networkization.