work on violence against firms in Russia has tended to be either qualitative in nature or use perceptions based measures from surveys of firms. As noted in the introduction, our paper provides one of the first systematic tests using objective data, which we discuss in detail below.

The government has recognized the extent of pressure on businesses and its negative consequences for economic development. One example of attempts to react to this phenomenon is the changes made to the criminal code in 2009 to prevent arrests of business owners whose firms are being investigated. Another project, the NGO Center for Public Procedures “Business Against Corruption” (BAC-Center) was founded in 2011 by the association ‘Business Russia’ with direct support by top-level governmental officials and given a mandate to track violent pressure on firms and raider attacks. State support for the center at the highest levels was clearly signaled when the office of the ombudsman for entrepreneurs was formed within the presidential administration in 2012 and the center was formally adjoined to it (Yakovlev, Sobolev, and Kazun 2014).

However, even after these high-level attempts to limit pressure on businesses, the situation did not change substantially. The arrest of billionaire Vladimir Evtushenkov, who was the principal owner of the “Sistema” holding company, and the subsequent confiscation of his company’s shares in the oil company “Bashneft” has shown that even completely loyal oligarchs are not necessarily protected from unpredictable pressure from the state. In Evtushenkov’s case, his firm’s shares in “Bashneft” were coveted by state-owned firms.<sup>8</sup> In February of 2016, President Vladimir Putin personally took the initiative to create a special working group to resolve conflicts between the coercive apparatus and businesses.<sup>9</sup> On the one hand, the President’s initiative reflect an awareness at the highest levels that the continued threat of coercive structures to property rights is a major issue for future economic development. On the other hand, the creation of this group can also be regarded as recognition from the country’s top leadership that previous attempts to solve the problem of pressure on businesses have failed.

# **IV. DATA, RESEARCH DESIGN, AND HYPOTHESES**

# **A. Data**

This paper uses data from two enterprise surveys to explore regulatory uncertainty stemming from informal practice. Our main firm-level data comes from the Russian Firms in a Global Economy (RuFIGE) survey that was conducted by the Institute for Industrial and Market Studies, Higher School of Economics. The survey was conducted as part of a project aimed at assessing the comparative advantaged of Russian manufacturing firms on domestic and global markets in a comparative perspective. The survey took place in summer and autumn of 2014 and included 1,950 firms in 60 Russian regions. We choose to use the RuFIGE data set as our primary firm-level data for several reasons. First, RuFIGE is the most recent firm-level survey to provide data on investment, providing a more contemporaneous sense of how uncertainty is shaping investment decisions in Russia’s regions. Second, the RuFIGE data set also is unique in including questions about investment over a longer period (3 years), which helps to provide a more stable, less variance driven understanding of investment decisions. Finally, RuFIGE (similarly to the RR BEEPS) includes numerous questions on ownership structure, the receipt of support from the state, and receipt of public procurement contracts. These variables are likely correlated with the extent to which firms have political connections that can be used to ameliorate the effects

> 8 “The Arrest Of A Billionaire Does Not Bode Well For Russia's Economy” // http://www.businessinsider.com/thearrest-of-a-russian-billionaire-does-not-bode-well-for-russias-economy-2014-9.

> 9 http://www.kremlin.ru/events/president/news/51329.

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