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A Method for Assessing Threats to the Economic Security of a Region: A Case Study of Public Procurement in Russia

Author

Listed:
  • Valentina Kravchenko

    (Peter the Great St. Petersburg Polytechnic University, Institute of Industrial Management, Economics and Trade, Graduate School of Industrial Economics, 195251 St. Petersburg, Russia)

  • Tatiana Kudryavtseva

    (Peter the Great St. Petersburg Polytechnic University, Institute of Industrial Management, Economics and Trade, Graduate School of Industrial Economics, 195251 St. Petersburg, Russia)

  • Yuriy Kuporov

    (Peter the Great St. Petersburg Polytechnic University, Institute of Industrial Management, Economics and Trade, Graduate School of Industrial Economics, 195251 St. Petersburg, Russia)

Abstract

The issue of economic security is becoming an increasingly urgent one. The purpose of this article is to develop a method for assessing threats to the economic security of the Russian region. This method is based on step-by-step actions: first of all, choosing an element of the region’s economic security system and collecting its descriptive indicators; then grouping indicators by admittance-process-result categories and building hypotheses about their influence; testing hypotheses using a statistical package and choosing the most significant connections, which can pose a threat to the economic security of the region; thereafter ranking regions by the level of threats and developing further recommendations. The importance of this method is that with the help of grouping regions (territory of a country) based on proposed method, it is possible to develop individual economic security monitoring tools. As a result, the efficiency of that country’s region can be higher. In this work, the proposed method was tested in the framework of public procurement in Russia. A total of 14 indicators of procurement activity were collected for each region of the Russian Federation for the period from 2014 to 2018. Regression models were built on the basis of the grouped indicators. Ordinary Least Squares (OLS) Estimation was used. As a result of pairwise regression models analysis, we have defined four significant relationships between public procurement indicators. There are positive connections between contracts that require collateral and the percentage of tolerances, between the number of bidders and the number of regular suppliers, between the number of bidders and the average price drop, and between the number of purchases made from a single supplier and the number of contracts concluded without reduction. It was determined that the greatest risks for the system were associated with the connection between competition and budget savings. It was proposed to rank analyzed regions into four groups: ineffective government procurement, effective government procurement, and government procurement that threatens the system of economic security of the region, that is, high competition with low savings and low competition with high savings. Based on these groups, individual economic security monitoring tools can be developed for each region.

Suggested Citation

  • Valentina Kravchenko & Tatiana Kudryavtseva & Yuriy Kuporov, 2021. "A Method for Assessing Threats to the Economic Security of a Region: A Case Study of Public Procurement in Russia," Risks, MDPI, vol. 9(1), pages 1-10, January.
    • Handle: RePEc:gam:jrisks:v:9:y:2021:i:1:p:10-:d:473729
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    References listed on IDEAS

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    1. Inna Gryshova & Mykola Kyzym & Irina Hubarieva & Viktoriia Khaustova & Anatoly Livinskyi & Mykola Koroshenko, 2020. "Assessment of the EU and Ukraine Economic Security and Its Influence on Their Sustainable Economic Development," Sustainability, MDPI, vol. 12(18), pages 1-26, September.
    2. Dastidar, Krishnendu Ghosh & Mukherjee, Diganta, 2014. "Corruption in delegated public procurement auctions," European Journal of Political Economy, Elsevier, vol. 35(C), pages 122-127.
    3. Huang, Yangguang & Xia, Jijun, 2019. "Procurement auctions under quality manipulation corruption," European Economic Review, Elsevier, vol. 111(C), pages 380-399.
    4. Wang, Hong, 2020. "Quality manipulation and limit corruption in competitive procurement," European Journal of Operational Research, Elsevier, vol. 283(3), pages 1124-1135.
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    Cited by:

    1. Huasheng Zhu & Duer Su & Fei Yao, 2022. "Spatio-Temporal Differences in Economic Security of the Prefecture-Level Cities in Qinghai–Tibet Plateau Region of China: Based on a Triple-Dimension Analytical Framework of Economic Geography," IJERPH, MDPI, vol. 19(17), pages 1-29, August.
    2. Viktoria Degtereva & Maria Liubarskaia & Viktoria Merkusheva & Alexey Artemiev, 2022. "Increasing Importance of Risk Management in the Context of Solid Waste Sphere Reforming in Russian Regions," Risks, MDPI, vol. 10(4), pages 1-13, April.
    3. Awad Ali Alanzi, 2021. "Saudi Procurement System and Regulations: Overview of Local and International Administrative Contracts," Laws, MDPI, vol. 10(2), pages 1-15, May.

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