A New Approach to Identifying Political Connections: Evidence from the Russian Banking Sector

2025. No. 1/FE/2025.

Kozlov N., Semenova M.

This paper introduces a new approach to identifying and operationalizing the business political connections of banks.  We manually collect data on 2,598 bankers who owned or worked in 115 Russian banks from 2015 to 2021 and use this dataset to describe the types of political connections of Russian banks and to unveil their institutional patterns by applying cluster analysis. We confirm the widespread and heterogeneous nature of political connections in the Russian banking sector and provide a more detailed understanding of the degree of penetration of political interests into the activities of banks. We propose and explore a set of variables catching the origins, relevance, and maturity of political connections which produce additional variation among banks and could be used to facilitate a better and more theoretically grounded assessment of the effects of political connections on the business choices and the financial performance of banks.

Keywords: Russia, Political Connections, Banks