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Investment potential of Russia’s economy: Opportunities for financing the development

Author

Listed:
  • Yury N. Vorobyov

    (Vernadsky Crimean Federal University)

  • Elena I. Vorobyova

    (Vernadsky Crimean Federal University)

Abstract

Any country that faces the task of overcoming technological backwardness has to address the problem of investment resources’ sufficiency. The paper delves into the theoretical foundations of Russia’s investment potential and identifies financial opportunities to increase it. The methodology of the research is based on generalisation of and elaboration on the concepts in the field of investment potential. The authors apply the dialectical method, a system-structural analysis, and use traditional statistical methods for analysing the data. The researchers explore the essence of investment potential; specify its components, material basis and reveal sources of investment resources to form and increase it. With the purpose of grounding the economic essence of investment potential, the researchers list its principal attributes, which all together allow formulating a scientific definition of the concept “investment potential of the national economy”. Having analysed the data on Russia’s GDP, gross domestic savings, gross capital formation, gross fixed capital formation and investments in fixed assets, the authors prove that over the last six years financial opportunities for forming the investment potential obviously did not tend to increase due to the economic downturn. Insufficient volume of gross domestic savings and an outflow of financial capital from the country exceeding the inflow significantly limit the opportunities for the national investment potential growth. In the long run, existing level of financial support of investments in fixed assets cannot resolve the issues of economic growth, and therefore, it is necessary to increase the investments in fixed assets using new approaches and tools.

Suggested Citation

  • Yury N. Vorobyov & Elena I. Vorobyova, 2019. "Investment potential of Russia’s economy: Opportunities for financing the development," Journal of New Economy, Ural State University of Economics, vol. 20(1), pages 41-60, March.
    • Handle: RePEc:url:izvest:v:20:y:2019:i:1:p:41-60
    DOI: 10.29141/2073-1019-2019-20-1-4
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    References listed on IDEAS

    as
    1. Alban Moura, 2018. "Investment Shocks, Sticky Prices, and the Endogenous Relative Price of Investment," Review of Economic Dynamics, Elsevier for the Society for Economic Dynamics, vol. 27, pages 48-63, January.
    2. Richard Nelson, 2008. "Economic Development from the Perspective of Evolutionary Economic Theory," Oxford Development Studies, Taylor & Francis Journals, vol. 36(1), pages 9-21.
    3. Alban Moura, 2018. "Investment Shocks, Sticky Prices, and the Endogenous Relative Price of Investment," Review of Economic Dynamics, Elsevier for the Society for Economic Dynamics, vol. 27, pages 48-63, January.
    4. Li, Rui & Wan, Chi & Wang, Mengying, 2018. "U.S. corporate investment and foreign penetration: Imports and inward foreign direct investment," Journal of International Money and Finance, Elsevier, vol. 85(C), pages 124-144.
    Full references (including those not matched with items on IDEAS)

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    More about this item

    Keywords

    investment potential; investment resources; financial resources; gross domestic savings; gross capital formation; investments in fixed capital.;
    All these keywords.

    JEL classification:

    • D92 - Microeconomics - - Micro-Based Behavioral Economics - - - Intertemporal Firm Choice, Investment, Capacity, and Financing
    • E22 - Macroeconomics and Monetary Economics - - Consumption, Saving, Production, Employment, and Investment - - - Investment; Capital; Intangible Capital; Capacity
    • G24 - Financial Economics - - Financial Institutions and Services - - - Investment Banking; Venture Capital; Brokerage

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