DOI: 10.32609/j.ruje.10.124364

Authors: Duc Huu Nguyen, Irina P. Khominich

Abstract: The conflict between Russia and Ukraine, along with the imposition of energy sanctions on Russian energy sources, has prompted a reassessment of the global energy market. Utilizing the difference in differences model, this study investigates the financial performance disparities among fossil fuel companies operating within the EU-27 bloc, Russia, and countries such as the United States, the United Kingdom, Qatar, Norway, India, China, UAE, and Saudi Arabia (countries that have benefitted from exporting fossil energy to the EU-27 as an alternative to Russia) during the period spanning from 2016 to 2023. The result reveals that fossil fuel companies from the United States, the United Kingdom, Qatar, Norway, India, China, UAE, and Saudi Arabia experienced significant advantages from substituting Russia in supplying oil, natural gas, and LNG to the EU-27. This is evidenced by a notable enhancement in their financial performance compared to both Russian and EU-27-based fossil fuel companies. For fossil fuel companies, the study highlights the urgency of diversifying export and import markets, broadening partnerships for fossil fuel trading and refining, transitioning to the production of lower-emission energy forms, and enhancing sustainable development practices to mitigate risks. At the national level, the research results indicate that countries reliant on imported fossil energy, akin to most countries within the EU-27, must swiftly diversify their energy sources and focus on developing renewable energy. This strategy is crucial to avoid unexpected shocks in the energy market in the era of geopolitical conflicts and uncertainty.

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DOI: 10.32609/j.ruje.10.112848

Authors: Igor V. Fokin, Ivan V. Rozmainsky

Abstract: In this paper, we conducted an empirical study to assess the nature of the relationship between financialization and the level of innovation activity in Russian publicly listed companies. We relied on previous research in this area and on the models proposed by the researchers. In the empirical part, we prepared four models, based on the sample including 245 Russian publicly listed companies and having the observation period from 2000 to 2021. We applied Ordinary Least Square (OLS), Pooled Least Square (PLS) models, as well as panel data models with fixed and random effects. According to our hypotheses, financialization has a negative impact on the level of innovation in firms and its impact is varying for firms with different levels of financial constraints. The results of the study have shown that these hypotheses were partially confirmed. We have been convinced of the negative impact of financialization on innovation activity, however, if financial constraints were taken into account, not all coefficients had an unambiguous interpretation. Our assumptions and the results obtained, which generally confirmed the hypotheses put forward, are based on a theoretical understanding of the role of shareholder value orientation in this process. Confirmation of these assumptions is set as the goal of further research.

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DOI: 10.32609/j.ruje.7.58419

Authors: Dmitry S. Tretyakov, Ivan V. Rozmainsky

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.

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