DOI: 10.32609/j.ruje.11.154180

Authors: Wasim Ullah

Abstract: Financial development plays a crucial role in shaping economic growth, yet it can introduce volatility. This study examines the relationship between financial development and economic growth volatility. Using panel data from 60 countries (30 developed and 30 developing) for 1981–2022, we employ panel-corrected standard errors and generalized method of moments to ensure robustness. Financial development is analyzed through financial institutions and financial markets across three dimensions: depth, access, and efficiency. Conceptually, the paper finds that the supply-leading hypothesis does not account for the economic growth volatility associated with excessive financialization. The results indicate that, at higher levels, financial development has a volatility-enhancing impact in developed countries, while in developing countries it has a volatility-reducing effect. Policymakers in developed countries should ensure that credit expansion is aligned with real-sector development. Regulators should monitor adverse effects of financial depth and ensure funds are directed toward real-sector growth, while improving access and efficiency. In a too‑much-finance scenario, economies need moderators — such as strong regulatory quality and well-defined rights for creditors and borrowers — to mitigate volatility-enhancing effects.

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DOI: 10.32609/j.ruje.11.159114

Authors: Veronika A. Khlyupina, Svetlana V. Golovanova, Eduardo Pontual Ribeiro

Abstract: Broadcast TV is a well-known example of a two-sided platform where cross network effects on the viewer and advertising sides interact. Like many platforms, it is advertiser-financed. While the literature shows that viewers dislike advertising, we explore a unique data set and distinguish between paid and non-paid (informative) ads. Cross-network effects’ estimates show that the latter carry a positive network effect on viewership. We also explore a significant change in public interest for more information in TV content in Russia in 2022 to estimate structural changes to cross-network effects. The results indicate that negative paid ads’ cross-network effects on viewership demand become stronger while positive non-paid (information) ads cross-network effects become weaker, even conditional on TV programing changes. Symmetrically, on the other side of the platform, advertisers value viewership less after the preference change.

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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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DOI: 10.32609/j.ruje.6.48556

Authors: Sharofiddin Ashurov, Anwar Hasan Abdullah Othman, Romzie Bin Rosman, Razali Bin Haron

Abstract: Foreign direct investment (FDI) is viewed as one of the most crucial forms of capital inflows and significant drivers of economic growth in numerous countries. In particular, developing countries, emerging economies and countries engaged in the process of development have recognized the crucial importance of FDI as a critical contributor to their economic progress and increasing economic opportunities. The following research investigated and identified the determinants of FDI in the Central Asian countries, specifically Tajikistan, Kazakhstan, Kyrgyzstan, Turkmenistan and Uzbekistan, between 2000 and 2017. The methodology employed in the first part included comparative analysis of the foreign investment trends and gross domestic product (GDP), as well as an endogenous growth model. The result showed that five variables are robustly significant of FDI determinants: FDI (previous year), GDP, labor force, trade openness and tax. Additionally, this paper demonstrates that among the most significant FDI contributors are China, Russia and Japan as well as European countries because of the economic opportunities available; however, the USA is considered by Central Asian countries to offer the most opportunities for security control considerations rather than economic opportunities. Furthermore, the results suggest that the authorities in the Central Asia region should enhance the stability of their economic growth, labor force, trade openness and tax regulations to attract more FDI to the region.

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DOI: 10.32609/j.ruje.5.47349

Authors: Philipp Kartaev, Ilya Medvedev

Abstract: The paper examines the impact of oil price shocks on inflation, as well as the impact of the choice of the monetary policy regime on the strength of this influence. We used dynamic models on panel data for the countries of the world for 2000–2017. It is shown that the impact of changes in oil prices on inflation is carried out predominantly through the channel of exchange rate. The paper demonstrates the influence of the transition to inflation targeting on the nature of the relationship between oil price shocks and inflation. This effect is asymmetrical: during periods of rising oil prices, inflation targeting reduces the effect of the oil prices pass-through, limiting the negative effects of shock. During periods of decline in oil prices, this monetary policy regime, in contrast, contributes to a stronger pass-through, helping to reduce inflation.

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