IDEAS home Printed from https://ideas.repec.org/a/arh/jrujec/v7y2021i3p233-249.html
   My bibliography  Save this article

An empirical analysis of the influence of financialization on investment in Russia

Author

Listed:
  • Dmitry S. Tretyakov

    (HSE University, St. Petersburg, Russia)

  • Ivan V. Rozmainsky

    (HSE University, St. Petersburg, Russia)

Abstract

This paper tries to estimate the impact of financialization on fixed investment in Russia. The work is carried out by using panel data based on reports of non-financial publicly listed companies for 1999–2019. The study finds that financial expenses aimed at paying interest on external financing and paying dividends — that is, focusing on shareholder value, and hence decreasing the internal funds of companies, reduce real investments. Financial incomes have shown the crowding-out effect for large companies. Financial incomes as additional "free" funds in large companies are not perceived as an opportunity to accumulate fixed assets. Managers prefer to increase ­financial investments instead of real ones. In small and medium-sized companies, financial incomes, however, drive the growth of physical investment. This is because small firms, at a particular stage in their lives, find it more profitable to invest in their own growth. The results from the general sample, without dividing by size, indicate that financialization in Russia clearly reduces real investment.

Suggested Citation

  • Dmitry S. Tretyakov & Ivan V. Rozmainsky, 2021. "An empirical analysis of the influence of financialization on investment in Russia," Russian Journal of Economics, ARPHA Platform, vol. 7(3), pages 233-249, December.
    • Handle: RePEc:arh:jrujec:v:7:y:2021:i:3:p:233-249
    DOI: 10.32609/j.ruje.7.58419
    as

    Download full text from publisher

    File URL: https://rujec.org/article/58419/
    Download Restriction: no
    File URL: https://libkey.io/10.32609/j.ruje.7.58419?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    More about this item

    Keywords

    financialization investment panel data non-financial companies Russian economy.;

    JEL classification:

    • C23 - Mathematical and Quantitative Methods - - Single Equation Models; Single Variables - - - Models with Panel Data; Spatio-temporal Models
    • D22 - Microeconomics - - Production and Organizations - - - Firm Behavior: Empirical Analysis
    • G30 - Financial Economics - - Corporate Finance and Governance - - - General

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:arh:jrujec:v:7:y:2021:i:3:p:233-249. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    We have no bibliographic references for this item. You can help adding them by using this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Teodor Georgiev (email available below). General contact details of provider: https://rujec.org/ .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.