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The level of conflict in Russia's business environment reached the highest level since 2017

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The level of conflict in Russia's business environment reached the highest level since 2017

The level of conflict in the business environment in Russia in the first quarter of 2021 reached all-time highs since 2017. This is demonstrated by the Business Environment Conflict Index developed by experts of investment company A1 and Skolkovo Moscow School of Management, RBC writes.

The index is calculated by a formula that takes into account the dynamics of corporate litigation and conflicts, media reports about them, changes in the number of large companies in the market. The analysis does not include statistics on criminal cases against entrepreneurs because of the impossibility to clearly identify those related specifically to corporate disputes.

Thus, the growth of the index since the beginning of 2021 reached a record value of 1.96. For comparison, one of the highest indicators - 1.93 - was observed in the fourth quarter of 2019. An increase in the level of conflict in the business environment was observed in 80% of Russian regions, and in 15 of them the index increased by more than 100%.

Among the reasons for such growth, experts point out that the economy, the judicial system and the authorities have emerged from the "pandemic mode" in which they have been in since spring 2020. Businesses have resumed implementation of plans previously postponed due to the pandemic, including mergers and acquisitions, lawsuits and intensive corporate construction. A wave of bankruptcies, which are becoming an increasingly important factor in corporate relationships and business processes, is also contributing to the growing level of conflict activity. Due to bankruptcies and exit from the market the number of companies, which by their financial indicators fit the criteria of the A1 Index, decreased. According to the authors of the study, while at the beginning of 2017 there were more than 350 thousand such companies, four years later their number has fallen below 250 thousand for the first time.

It is noted that large and medium-sized corporate conflicts at the beginning of 2021 "literally exploded the media" - the number of references to them has increased by more than 50% compared to the end of last year. For instance, the biggest conflicts were related to Petropavlovsk, one of the largest gold producers, and the lawsuits filed by the heirs and partners of businessman Dmitriy Bosov.


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Karina Kamalova

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