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We examine how regional-level political influence affects firm financial performance and survival. Combining representative survey data on mid-sized manufacturing firms in Russia with official registry data, we find that politically influential firms exhibit higher profitability and retain larger financial investments than non-influential firms. At the same time, we find no association between regional political influence and access to bank lending. Most importantly, our empirical analysis suggests that the benefits of influence may be transient. Influential firms experienced significantly lower growth during our 2004--2010 sample period than non-influential firms. Moreover, influential firms had a significantly higher probability of going bankrupt after the 2008 global financial crisis than non-influential firms. [ABSTRACT FROM AUTHOR]

The article discusses the impact of political connections on firm performance in Russia. It mentions development in Russian regions such as differences in per capita income public health and wages and growth in tax revenues. It also reveals key institutional factors that influence business organizations and managerial behavior.

The article analyses the impacts of political influence on firm performance. It focuses on mid-sized manufacturing firms, excluding Russia's largest stock-listed corporations, which have influence on political decision-making. Other topics include evidence on negative association between political influence and firm growth and higher financial investment ratios of influential firms.