Exploring the Future of Russia's Economy and Markets : Towards Sustainable Economic Development

Rich in natural resources, straddling Europe and Asia, and home to markets of immense scale, Russia is an essential, critical player in an unprecedently complex global economy. Yet it has yet to fully exploit its unique position within this brave new world. Exploring the Future of Russia's Economy and Markets offers the first serious study of Russia's contemporary economic growth and economic aptitude. Based on the April 2017 conference "'New Reality' and Russian Markets" held at Harvard University and co-hosted by Harvard Davis Center for Russian and Eurasian Studies and RUDN University, Moscow, it brings together world-renowned thinkers to offer the latest empirical research on recent financial risks, institutional policies, and financial stability, all while weaving sound economic analyses around countercyclical expansionary macrotrends within the global market, current fiscal and monetary policies, and business cycles. It provides definitive technical insights into fintech, industrial policies and technological parks, TNCs, the oil and natural gas industry, and the impact of international sanctions on Russia's sustainable development. Cumulatively, the chapters gathered here demand that Russia look for alternative key drivers to get its economy going. The distinguished economists gathered here offer flexible bases for economic and financial stability that would foster sustainable economic development for Russia. Exploring the Future of Russia's Economy and Markets is essential reading for economists, policy makers, and students wishing to understand how Russia might take full advantage of its pivotal position within the world economy. Front Cover Exploring The Future of Russia’s Economy And Markets: Towards Sustainable Economic Development Copyright Page Acknowledgments Contents About the Editor About the Contributors Preface Chapter 1 How Can FinTech Impact Russia’s Development? 1.1. Introduction 1.2. Payment 1.3. Loan and Credit 1.4. Investment 1.4.1. Money Markets 1.4.2. Fixed Income and Equity Investments 1.4.3. Artificial Intelligence in Investment 1.5. Insurance 1.6. The Next Steps Ahead for FinTech in Russia 1.7. Summary References Chapter 2 The Impact of Commercial Banking Development on Russian Economic Growth 2.1. Introduction 2.2. Literature Review 2.3. How Financial Development Affects Economic Growth 2.4. Methodology 2.5. Model to Identify Control Variables 2.6. Financial Development and Economic Growth 2.7. Conclusion References Chapter 3 The Russian Stock Market: Risks and Growth Drivers 3.1. Introduction 3.2. The Overall Performance of the Russian Stock Market 3.3. Empirical Analysis of the Risk Factors 3.3.1. Data and Methodology 3.3.2. Estimation Results 3.3.2.1. International CAPM Without Local Risks 3.3.2.2. International CAPM with Domestic Risks 3.4. Growth Opportunities 3.5. Conclusion References Acknowledgments Chapter 4 Will Industry 4.0 and Other Innovations Impact Russia’s Development? 4.1. Introduction 4.2. Literature Overview 4.3. Industry 4.0 and the IoT: Toward a New Russian Industrial Development? 4.3.1. Substantiating Perspectives of Industry 4.0 as a Top-priority Direction of Sustainable Industrial Development of Rus... 4.3.2. A Strategy for Optimizing the Sustainability of Industrial Development 4.4. Conclusion References Chapter 5 Industrial Development, Structural Changes, and Industrial Policy in Russia 5.1. Dynamics of Industrial Production in Russia and Abroad 5.2. Key Features of the Russian Economy and Industry 5.3. Industrial Development in Russia since 2005: Major Changes and Trends 5.4. Stages of the Industrial Development in Russia since 2005 and Role of the Government 5.5. Contemporary Industrial Policy in Russia: Relevant Examples and Basic Types 5.5.1. Compensation or Prevention of Possible Adverse Changes 5.5.2. Catching-up Development 5.5.3. Advance Development 5.6. Strategic Objectives of Industrial Development in Russia and Industrial Policy Instruments of the “New Wave” 5.7. Conclusion References Chapter 6 Clusters and Innovational Networks Toward Sustainable Growth 6.1. Introduction 6.2. The Development of Clusters and Innovational Networks 6.3. Scenarios of Future Growth of Russia’s Economy: A Game Theory Approach 6.4. Recommendations and Policy Analysis 6.5. Conclusion References Chapter 7 Will the Circular Economy Be the Future of Russia’s Growth Model? 7.1. Introduction: The Circular Economy 7.2. The Circular Economy: Theoretical Grounding 7.3. Applied Research Methods 7.4. What Are and Could Be the Economic Benefits of the Circular Economy for Russian Economic Growth? 7.5. Conclusion References Chapter 8 Technological Parks, “Green Economy,” and Sustainable Development in Russia 8.1. Introduction 8.2. The “Green Economy” in Russia: Tendencies, Problems, and Perspectives 8.3. The Development of Technological Parks in Russia and Their Contribution to the “Green Economy” 8.4. Policy Implications and Recommendations 8.5. Conclusion References Chapter 9 Oil and Gas Industry’s Technological and Sustainable Development: Where Does Russia Stand? 9.1. Introduction 9.2. Review of Oil and Gas Industry in Russia: The Crisis of 2014 9.3. Ruble vs Dollar in Russian Oil and Gas Industry 9.4. The Importance of the Arctic Zone 9.5. Lessons of 2014 Collapse for Russian Oil and Gas Sector and New Ways to Develop Natural Resources 9.6. Innovative Development in Oil and Gas Sector LNG 9.7. Conclusion References Chapter 10 TNCs in Russia: Challenges and Opportunities 10.1. Introduction: Features of Postcrisis Development 10.2. The Position of TNCs on the Russian Market: The Starting Point 10.3. Scenario Modeling 10.4. Prospects of TNCs at the Russian Market References Chapter 11 The Impact of International Sanctions on Russia’s Sustainable Development 11.1. Introduction 11.2. Sanctions Against Russia: Reasons and Chronology of Introduction, Classification 11.3. The Negative Side of the Anti-Russia Sanctions 11.4. Positive Aspects of Anti-Russia Sanctions 11.5. Russian Counter-sanctions: Overview, Chronology, and Prospects 11.6. Conclusion References Chapter 12 Russia in Global Value Chains: Levels of Participation and Distribution of Gains 12.1. Introduction 12.2. Methodology of New Statistical Approach for Analyzing GVCs 12.3. Measuring Russia’s Participation in GVCs 12.3.1. FVA in Russian Exports 12.3.2. DVA in Russian Exports 12.3.3. Russia’s GVC Participation Index 12.3.4. Sectoral Dimension of Russia’s Participation in GVCs 12.4. Gainfully Linking into GVCs 12.5. The Future of Russia’s Integration into GVCs 12.6. Concluding Remarks References Chapter 13 Growth Scenarios for the Russian Economy 13.1. Introduction 13.2. A Brief Overview of Russia’s Socioeconomic Development and Economic Growth Strategies 13.3. Methodological Thoughts 13.3.1. Theoretical Model 13.4. Empirical Model 13.5. The Empirical Model Estimation Results 13.6. Prerequisites for Making Medium-term Development Scenarios 13.6.1. Human Capital Growth Rate 13.6.2. Growth Rates of the Population Size, Economically Active Population and Employment 13.6.3. Oil Price, Interest Rate, and Quality of Institutions 13.7. Scenario Calculations Main Findings 13.7.1. Investments and Accumulated Capital 13.7.2. Total factor productivity 13.7.3. GDP and Per Capita GDP Growth 13.8. Conclusion Acknowledgments References Index Based on the 2017 conference "'New Reality' and Russian Markets" held at Harvard University, this book brings together world-renowned thinkers to offer the latest empirical research on recent financial risks, institutional policies, and financial stability.