Factory Productivity and the Concession System of Incorporation in Late Imperial Russia, 1894-1908

(Please do not cite without permission) In late Imperial Russia, long-term capital was scarce. Incorporation in the Rus-sian Empire required a time-consuming and expensive Imperial concession, yet over four thousand Russian firms incorporated before 1914. I identify the characteristics of firms that chose to incorporate and measure the gains in productivity and growth in machine power enjoyed by corporations using a newly-constructed panel database of manufacturing enterprises I compiled from Imperial Russian factory censuses conducted in 1894, 1900, and 1908. Factories owned by corporations were larger, more produc-tive, and grew faster. Higher productivity factories were more likely to incorporate, and after incorporating, they added machine power and became even more productive. Results from an instrumental variables regression suggest that selection into incorpo-ration was not determined solely by productivity and could be influenced, for example, by connections to government officials. Comparing two kinds of corporations shows that firms sought not just access to stock markets but the corporate form’s full set of capital advantages