Author
Author's articles (3)
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#4 / 2016 Category: REGIONAL FINANCEThis paper empirically analyses the determinants of foreign direct investment inflows into the Russian regions. This problem has become highly relevant for the necessary modernization of the Russian economy after the recent economic slowdown and sharp decrease in budget revenues. The authors model foreign direct investment flows with the use of the gravity approach according to which investment flows are positively correlated with the size of the investor’s country as well as the size of the recipient region and are negatively correlated with the distance between investor and recipient. The empirical analysis is based on a constructed database consisting of the foreign direct investment flows from 179 investor countries into 78 Russian regions for the period 2006–2013. The authors apply the Poisson Pseudo Maximum Likelihood method and identify the following factors determining foreign direct investment inflows into the Russian economy: the gross domestic product of the investor’s country, the gross domestic product per capita in the recipient region, the distance from the investor to Moscow, the openness of the region, the economic situation in the region, the innovative capacity of the region and the foreign direct investment of the previous period. Interestingly, the distance from the recipient region to Moscow matters for the regions in the western part of Russia (relatively close to Moscow) but is not significant for the regions in the eastern part (remote regions).
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#3 / 2019 Category: REGIONAL FINANCEPermanent inflow of foreign direct investment is a powerful driver of economic development in developing countries. However, the country’s underdeveloped institutional environment imposes additional costs on the investors. We identified the specificity of the institutional environment’s impact on attracting foreign direct investment (FDI) in developing countries with different levels of economic development. Based on the heterogeneity of the studied countries, we hypothesised that in developing countries institutions become an active determinant of FDI after exceeding a certain threshold. In other words, institutional factors do not affect FDI inflows into relatively underdeveloped countries among a group of developing countries whose level of economic development does not exceed the threshold. To test this hypothesis, we simulated an intra-group economic modelling based on the data of the World Bank, the Heritage Foundation and the For Peace Foundation for the period from 2005 to 2015. The main tool of econometric analysis was a panel regression with fixed effects at the country level and a two-step least squares method with instrumental variables. We used indices of economic freedom and the state insolvency as aggregated indicators of the non-overlapping groups of institutional factors. The study’s main results have confirmed the hypothesis that institutional factors affect FDI inflows only in the countries where gross national income per capita is higher than average. Moreover, we defined the threshold value of gross national income per capita that a country needs to achieve in order to make any institutional changes to enhance FDI inflows. Thus , government policies , aimed a t increasing the developing countries ’ attractiveness for foreign investors, should firstly take into account the level of economic development of the recipient country.
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#2 / 2020 Category: REGIONAL SOCIAL AND ECONOMIC PROBLEMSThe use of sanctions as means of coercion and motivation is not always effective. Ruling elites have an ability to shift the burden on less protected population of the country despite the risk of social unrest. The paper aims to perform an empirical analysis of the impact of economic sanctions on the population of the target countries in general and its individual groups in particular. We test three hypotheses: about the negative impact of economic and financial sanctions on the welfare of the poorest people, about the nonlinear relationship between economic growth and income inequality, and about the impact of country characteristics and the duration of sanctions on income distribution. Having applied econometric modelling to panel data, we found that economic and financial sanctions are detrimental to the low-income population and inappropriate for policies aimed at reducing income inequality. Indicators of economic growth can be linked with both an increase and a decrease in economic inequality due to the nonlinear form of their dependence. Regional characteristics of the countries of Africa, North America and South America determine their propensity to a higher level of inequality, as well as the long duration of sanctions. Finally, sanctions are not harming the richest people, as they are able to shift the burden of sanctions on the rest of the population. The research is relevant in practice, as its results can be taken into consideration when developing a sanctions policy to minimize harmful consequences for the civilian population.