Influence of shareholder equity on trade credit demand: The study of non-financial firms in Pakistan

Relevance. Most small-sized firms have little or no access to credit markets, which is why they prefer equity financing and usually pay higher dividends on this equity. When paying higher dividends, these small-sized debt-free firms continue to build a reputation in the markets. Research objective. The analysis focuses on the trade payables that impact shareholder equity. In Pakistan, most of the businesses are small and middle-sized. Most of the Pakistani SMEs have a low capital structure and these enterprises depend on their daily business needs, so equity financing is their primary source of funding. Data and Methods. The data source for our study is the financial statements of non-financial firms (in total, 156 firms) from the balance Sheet Analysis (BSA) and the Financial Statement Analysis (FSA) published by The State Bank of Pakistan (SBP). The financial statements also provide the data listed by the Pakistan Stock Exchange (PSX). The data cover the period from 2001 to 2017. This study primarily relies on the panel data model. The study applied the methods of descriptive analysis, correlation matrix, common regression model, fixed effect model, random effect model and then the Hausman test was performed to choose the best model. Results. The results of the study indicate a positive and significant relationship between shareholder equity and trade credit demand. Conclusion. Many investors require trade credit as a suitable tool for the growth of shareholders of the company. It is also used in many types of business schemes as the shareholder equity factor plays a role in profit generation through the use of trade credit transactions.

Prospects of China-Mongolia-Russia trade in the light of the COVID-19 pandemic

Relevance. China, Mongolia, and Russia are among each other’s major trade partners. The COVID-19 pandemic has had a large impact on global trade, which creates the need to analyze further prospects of the trilateral cooperation between China, Mongolia and Russia. Research objective. This study aims to analyze China-Mongolia-Russia trade cooperation in the context of the COVID-19 pandemic. Data and methods. This article applies a comparative analysis method to examine the development and changes in import and export trade between China, Mongolia, and Russia before and after the beginning of the project of the China-Mongolia-Russia Economic Corridor, from 2014 to 2020. The research relies on the data from the China Trade and Foreign Economy Statistical Yearbook, Northeast Asia Economic Statistics of Sea of Japan Economic Research Institute, Ministry of Commerce of the People's Republic of China, Russian Customs, and National Bureau of Statistics of Mongolia. Results. Along with the realization of the medium and short-term goal of raising the volume of trade turnover within the Corridor, the three countries seek to play more and more important roles as each other’s trade partners. It is observed that the impact of the COVID-19 pandemic on the volume of trade has not been significant, and thus the fundamental premises of trilateral trade cooperation have remained largely unchanged. Conclusions. To increase the volume of trade between China, Mongolia and Russia, it is necessary to improve the trade structure, reduce tariffs, establish free trade areas and actively promote the diversification of trade cooperation.

Key steps to smart specialization development of Russian regions

Relevance. The development of modern mechanisms for state regulation of regional processes, including those related to investment support for certain industries (e.g. the Spatial Development Strategy in Russia), requires a research-informed choice of ‘priority’ specializations. At the same time, such choice should meet the requirement of resilient economic development of these regions if the development of these specializations is supported on the national level. Research objective.The goal of this study is to assess the current structure of the Russian regions’ economy. We aim to identify the regions that have a specialization and thus can ensure resilient development and transition to smart specialization. Data and methods. The study proposes a methodological approach to identify the region’s smart specialization. The approach is based on the calculation of indicators that characterize the regions’ industries according to Russia’s national classifier of types of economic activity (OKVED2). Regions with pronounced industrial specialization are thus identified. The methodological approach has been tested by using statistical data for 84 regions. Results.43 regionswith industrial, export-oriented and extractive specialization were identified. We revealed nineregions that had sufficient prerequisites for the transition tosmart specialization and 11 regions that need to strengthen their knowledge-intensive component. Conclusion.The resulting list of Russian regions that can act as pioneer territories for the introduction of structural changes into the practice of state regulation can be of interest to policy-makers.

The structural factor of regional economic stability in Russia during the coronacrisis period

Relevance. The coronavirus pandemic has lead to one of the most serious crises in the global economy. The significant disparities between Russian regions influenced the levels of morbidity and their strategies of containing the crisis. Research objective. The aim of this paper is to identify the factors of regional development which, during the pandemic and in the post-pandemic period, affected and will affect the economic stability of Russian regions. Materials and Methods. The research is based on the Rosstat data, industry reviews, materials from analytical and consulting firms, Russian and international research literature. The research methodology is based on the structuralist approach and the provisions of the new structural economics put forward by J. Lin. The methods of comparative, statistical, and structural analysis were also used. Results. The most significant factors in regional economic development are the structure of the economy and the quality of public administration at the national and regional levels. The high-tech sector in the structure of a regional economy plays a pivotal role in ensuring its stability in the times of crisis. The study shows the need for a transition to independent national value chains. It is also necessary to develop a long-term national strategy aimed at stimulating the structural transformation of regional economies. Conclusions. The study has demonstrated the importance of the two key factors in shaping the regions’ responses to the pandemic and the speed of their recovery – the structure of regional economy and the role of the government. These factors should be taken into account by the Strategy of the State Regional Industrial Policy.

Digitalization in the development of human resource management in the Republic of Belarus

Relevance. Digitalization has led to a global transformation in the field of human resource management. Modern HR professionals view their roles not as mere administrators but as strategic enablers for key organizational decisions. In this scenario, there is a need to describe a digital system for efficient HR management (HRM) which is able to improve the skills of the employees. Research objective. The purpose of this study is to analyze the current state of the labor market in the Republic of Belarus and assess how digitalization affects human resource management strategies Data and methods. The article used the method of comprehensive data analysis in the study of the labor market in Belarus. The systemic approach was used to describe the strategy of HR digitalization. The official data of the Statistical Committee of the Republic of Belarus are used as the source of information. Results. The article analyzes the labor market in the Republic of Belarus. The factors that should be taken into account in the formation of human resource management strategy have been identified. The introduction of information and communication technologies in the country's enterprises was assessed and conclusions about the prospects of digital technology in human resource management were made. This work explains a strong relationship between the technological progress and HRM in organizations and companies. The paper shows how innovation can lead to a more proficient administration in HRM and improve the overall performance of the workforce. Several main zones of digitalization and its effects on human asset development are described. Conclusion. HRM has been changed by the advancement of the digital era. HR professionals no longer have to engage in manual procedures or deal with overwhelming volumes of data. With modern innovative solutions that enhance human resource management and growth, HR teams have greater freedom to shape organizational culture and productivity. The introduction of technology in human resource management offers great opportunities to optimize company resources and maximize results.

Regional differences in mainland China after the 1970s economic reform

Relevance. In recent years, China’s GDP has continued to grow, however, the regional gap in socio-economic development is still huge. It is, therefore, crucial to investigate the reasons behind regional disparities and the possible solutions to this problem. Research objective. This paper aims to examine the patterns of regional differences in mainland China after the economic reform of the 1970s. Data and methods. The study relies on the methods of comparative analysis and the data from the National Bureau of Statistics of the People’s Republic of China and the Statistical Yearbook Sharing Platform as well as the information from the national media portal - Xinhua News Agency. Results. The Chinese government’s application of differentiated measures, strategies and policies to different regions exacerbated the existing disparities. This paper elaborates on the future regional economic adjustments and plans and thus can be of interest to investors and business activists in China and other countries.

Spatial-territorial factors of economic growth in the Russian Federation

Relevance. In contemporary economic research, the study of the diversity of factors of national economic growth is gaining more and more significance, particularly with regard to the so-called 'spatial-territorial factors'. In contrast to the existing concepts of regional and spatial economy, the approach described in this paper is based on the hypothesis that it is possible to accelerate national economic growth. It can be done by stimulating extended economic reproduction on the subnational level, that is, on the level of relatively independent and self-contained spatial and administrative units such as regions of the Russian Federation, municipalities, agglomerations, etc. Research objective. The study aims to propose a decomposition of the economic growth rates in Russia by territorial units and to describe the spatial-territorial factors of national economic growth. Data and methods. To characterize the spatial-territorial factors, we used indices of the physical volume of gross regional product (GRP) and gross value added (GVA) in types of economic activities in Russian regions in percentage to the previous year for the period of 2013-2018. The types of economic activities were specified according to the Russian Classifier of Economic Activities of 2007 (OKVED) (Statistical Classification of Economic Activities in the European Community - NACE Rev. 1.1 (2013-2016)) and OKVED-2 (NACE Rev.2 (2017-2018)). Results. We estimated the contributions of Russian regions to national economic growth by analyzing the data on the key types of economic activities in a 6-year period (2013-2018). We also identified the regions which accounted for the largest losses in economic growth, on the one hand, and those which, on the other hand, acted as drivers of the country's economic development. Conclusion. There is a small number of regions lagging in terms of GRP and their influence on the national rates of economic growth is also insignificant. The general rates of GRP decline in a region are determined, first and foremost, by the sluggish growth in those types of economic activities that have the largest share in GRP. The number and share of the regions which demonstrate extended economic reproduction, that is, deliver at least 2% growth a year, are also quite small. These regions make up slightly more than 19% of the country's GRP. The largest group of regions comprises those regions that do not go beyond the simple reproduction (their growth rates are less than 2% a year), while their share in the country's GRP exceeds 74%. The so-called ‘heavyweights’ - regions accounting for the largest share in the country's total GRP - have the strongest effect on the national rates of economic growth, hindering it. It is the economic structure of these regions that has the biggest influence on the country's performance in such types of economic activities as wholesale and retail trade and maintenance and repair of motor vehicles. Sadly, it is in these sectors that the 'heavyweights' demonstrate the largest losses in GVA. As a result, these sectors suffer the most, which is bound to be reflected in the country's overall economic growth.

Connectivity of regional systems of consumer goods reproduction

Relevance. The question of how to achieve a more stable economic reproduction and how to expand it is of prime importance as reproduction determines the development of the whole economic system. Due to the constant economic transformations and the so-called 'networkization' of many processes, more research is needed into the spatial organization of reproduction, in particular the intraregional and interregional relationships between its elements. Research objective. This study aims at showing the spatial connections between phases of reproduction on the regional and municipal levels. Data and methods. The study relies on tools and methods of spatial econometric modelling, which includes calculations of univariate and bivariate global and local Moran's indices and diagrams of their dispersion. We constructed an adjacency matrix for Russian regions and municipalities. Overall, our study uses the data on 2,337 municipalities in 84 Russian regions. Results. It was found that the phase of consumption followed by the phases of distribution and exchange have the highest degree of connectivity. Spatial connectivity between the phases was the most pronounced in the case of retail trade and consumption and was much weaker in the case of wholesale trade and production. The analysis of the municipal-level data has revealed some previously undetected relationships between peripheral areas located near regional borders. Conclusions. In this study, we consider reproduction as a spatially organized economic system with interconnected, territorially dependent phases. Such approach provides us with new insights into the ongoing processes in the national economic space.

Socio-economic consequences of the first and second waves of the pandemic in Russian regions

Relevance. The spread of the coronavirus infection and the ensuing economic restrictions significantly influenced the main parameters of the socio-economic development of Russia and its territories, affecting the growth rate, production structure, territorial differentiation and competitiveness of Russian regions. Purpose of the study. The key goal of the study was to identify the socio-economic changes in the development of the country and its regions during the pandemic. Data and Methods. The analysis relies on open data on the socio-economic development of Russian regions for 2019–2021 (monthly, quarterly and annual periods), posted on the official website of Rosstat. Methodologically, the study is based on the comparative analysis of the data for the federal districts and their regions. Results. The study describes the main trends in the development of industry, trade, paid services, and investment potential and in the dynamics of unemployment and income in federal districts and regions. The first wave hit Russian regions the hardest due to the rigorous restrictions. Although no sharp recession was detected during the second wave, the stagnation in the key sectors persisted. The third wave is expected to have the same impact as the second. Conclusions. After the second wave subsided, there was a revival of economic activity in the spring of 2021. However, this has not turned into a steady trend yet. The coronavirus pandemic affected the competitiveness of regions. The importance of certain factors (including those related to resource potential) decreased during the pandemic, while the role of the competitive position of regions in the distribution of federal budget transfers increased.

Program-modular approach to the coordination of interests of participants of regional water markets (the case of southern regions of Russia)

Relevance. The efficiency of water management is determined by the quality of managerial decision-making. These decisions should ensure the balance of interests of all the actors in regional water markets. At present, in Russia, however, the balance of interests is considered only in macro-level strategies, which leads to the inefficiency of water distribution in regions. The study of the issues of rational distribution of water resources and their use in various industries and spheres of activity is, therefore, particularly relevant. Research objective. This article aims to propose methodology for maintaining the optimal balance between the interests of economic actors in regional water markets. Data and methods. This article proposes a program-modular approach to building a more efficient water management system. It is shown how the proposed methodology based on the incremental model of management can be used for balancing the interests of economic agents (suppliers and consumers of water resources). Results. It is proved that the plurality and divergence of interests of economic agents makes it difficult to manage them and thus precludes social and economic development of territories. The structural-functional analysis of the incremental model reveals various types of connections between the water-retaining capacity of gross regional product and indexes of industrial production for regions of the South Federal District. Conclusions. The prospects of development of water management in regions are associated with ensuring the balance of interests of the water market’s participants. The program-modular approach proposed by the authors combines the administrative and resource potential of regional water management and aligns the goals on the regional level with the more general goals of hydropower modernization. The novelty of our research is that it relies on the incremental model, which, unlike other models of management, leads to an incremental achievement of the desired through certain iterations.