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Investment Development of Russian Regions Backed up by Natural Monopolies

Author

Listed:
  • S.N. Silvestrov
  • N.V. Kuznetsov
  • V.V. Ponkratov
  • D.A. Smirnov
  • N.E. Kotova

Abstract

The article considers the issues of the relationship between business investment activities and the economic and social development of the regions. Based on the statistical data analysis it is shown that the decrease in investment activities negatively affects all key indicators of regional development after a short period of time. The current level of the regional investment activities can be characterized as unsatisfactory and preventing from achieving the declared goals of the development of the Russian Federation. The paper shows that a peculiarity defining Russian economy is that its significant part is actually controlled by natural monopolies. At the same time, they themselves are strongly sensitive to all the problems of socioeconomic development of the country's territories and, therefore, are parties concerned in ensuring sustainable and qualitative growth of regional economies. Today many of the natural monopolies implement large-scale investment programs with allocated substantial resources. The analysis of these investment programs showed that they all contain components that contribute to the development of the region where the manufacturing facilities or transportation capacities of these companies are located. It is concluded that a systemic state investment policy aimed at stimulating real investments, rather than "portfolio" ones, is required to address the problem of sustainable economic growth. Moreover, when drawing up investment programs for natural monopolies and regional development plans, it is important to coordinate all these plans, to reconcile state strategic planning with regional development programs, and those with the development programs for natural monopolies and regional businesses. It is proposed to amend the legislation governing the processes of strategic planning at the regional and federal levels aimed at optimization of the state investment planning system and encouragement of the private sector participation in regional investments.

Suggested Citation

  • S.N. Silvestrov & N.V. Kuznetsov & V.V. Ponkratov & D.A. Smirnov & N.E. Kotova, 2018. "Investment Development of Russian Regions Backed up by Natural Monopolies," European Research Studies Journal, European Research Studies Journal, vol. 0(3), pages 89-99.
    • Handle: RePEc:ers:journl:v:xxi:y:2018:i:3:p:89-99
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    References listed on IDEAS

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    1. Emmanuelle Auriol & Pierre M. Picard, 2009. "Government Outsourcing: Public Contracting with Private Monopoly," Economic Journal, Royal Economic Society, vol. 119(540), pages 1464-1493, October.
    2. Claire S. H. Lim & Ali Yurukoglu, 2018. "Dynamic Natural Monopoly Regulation: Time Inconsistency, Moral Hazard, and Political Environments," Journal of Political Economy, University of Chicago Press, vol. 126(1), pages 263-312.
    3. Sebastian Nick & Heike Wetzel, 2016. "The hidden cost of investment: the impact of adjustment costs on firm performance measurement and regulation," Journal of Regulatory Economics, Springer, vol. 49(1), pages 33-55, February.
    4. Ioannis N. Kessides, 2005. "Infrastructure Privatization and Regulation: Promises and Perils," The World Bank Research Observer, World Bank, vol. 20(1), pages 81-108.
    5. Sebastian Nick & Heike Wetzel, 2016. "The hidden cost of investment: the impact of adjustment costs on firm performance measurement and regulation," Journal of Regulatory Economics, Springer, vol. 49(1), pages 33-55, February.
    6. Andrade, Tiago, 2014. "The impact of regulation, privatization and competition on gas infrastructure investments," Energy, Elsevier, vol. 69(C), pages 82-85.
    7. Rudiger Ahrend & William Tompson, 2005. "Unnatural Monopoly: The Endless Wait for Gas Sector Reform in Russia," Europe-Asia Studies, Taylor & Francis Journals, vol. 57(6), pages 801-821.
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    Cited by:

    1. V. Ponkratov & A. Karaev & S. Solyannikova & O. Gorlova & D. Smirnov & O. Makashina, 2018. "Impact of Fiscal, Monetary and Structural Economic Policies on the Growth Rates of Leading Economies: 2000-2016," European Research Studies Journal, European Research Studies Journal, vol. 0(Special 3), pages 333-343.
    2. E.M. Akhmetshin & A.V. Pavlyuk & V.V. Ling & D.V. Medovnikova & R.H. Azieva, 2018. "Innovative Intellectual Property Products: The Case of Russian Federation," European Research Studies Journal, European Research Studies Journal, vol. 0(Special 3), pages 303-316.

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    More about this item

    Keywords

    state investment policy; natural monopolies; investment activity; government regulation; development programs; regional economy; regional development; real investment promotion; strategic planning;
    All these keywords.

    JEL classification:

    • E22 - Macroeconomics and Monetary Economics - - Consumption, Saving, Production, Employment, and Investment - - - Investment; Capital; Intangible Capital; Capacity
    • G38 - Financial Economics - - Corporate Finance and Governance - - - Government Policy and Regulation
    • L32 - Industrial Organization - - Nonprofit Organizations and Public Enterprise - - - Public Enterprises; Public-Private Enterprises
    • L43 - Industrial Organization - - Antitrust Issues and Policies - - - Legal Monopolies and Regulation or Deregulation
    • R11 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - General Regional Economics - - - Regional Economic Activity: Growth, Development, Environmental Issues, and Changes

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