Financial Journal № 5(51) September-October 2019
Olga V. Bogacheva, Oleg V. Smorodinov
Management of “Transit” Revenues of the Federal Budget in Russia, p. 9-20
The article is dedicated to issues related to management of the so-called transit revenues in modern budgeting in Russia. By “transit” revenues the authors mean the category of non-tax budget revenues which are managed outside of established budgetary procedures, are not reflected in federal laws on budget, and are only included in the annual budget execution reports prepared by the Russian Treasury. The authors focus on the two most widespread types of “transit” revenues, i.e. on revenues of foreign establishments from legally permitted activities, and on remaining balances of subsidies and other targeted inter-budget transfers, returned to the federal budget. The major problem of “transit” revenues is that their volume increase and scope extension could cause additional risks associated with stability and robustness of the Russian budgetary system. As a result of the analysis, it was concluded that there is no universal solution to this problem, since each type of “transit” revenues is caused by its own reason or group of reasons. The authors analyze modern international experience in similar areas of revenue management and assess the viability of its application in budget revenue management in Russia. “Transit” revenues of foreign establishments originate from their unique legal status, allowing them to keep part of the revenues in the current year and/or in the future periods. Thus, they function in accordance with the net budgeting principle. As for “transit” revenues originated from the return of remaining balances of inter-budget transfers to the federal budget, their growth could be limited by the introduction of a new budgetary instrument, namely a revenue plan.
Keywords: federal budget, non-tax revenues, consolidated budget allocation, revenues of foreign establishments, inter-budget transfers, reserve fund of the Russian Government
JEL: H27, H61
For citation: Bogacheva O.V., Smorodinov O.V. Management of “Transit” Revenues of the Federal Budget in Russia. Financial Journal, 2019, no. 5, pp. 9–20 (In Russ.). DOI: 10.31107/2075-1990-2019-5-9-20.
Boris I. Alekhin
Russia’s Fiscal Sustainability. What Bohn’s Test Has Revealed, p. 21-36
Sustainability of Russia’s fiscal policy in 1999–2018 was explored by applying Bohn’s test to 20 annual observations and 79 quarterly observations. Budget policy is sustainable as long as primary surpluses positively and significantly respond to changes in the debt-GDP ratio. The test revealed that in both samples the fiscal reaction is positive and significant for total and external debt ratios, and negative and significant for domestic debt ratio. So, overall Russia’s fiscal policy was sustainable in 1999–2018. Large revenues from oil and gas exports secured a modest budget surplus, on average, over the period, thus reducing the demand for borrowed funds and producing a very low domestic debt ratio. As Bohn notes, “an inefficiently low level of public debt” may explain why the test fails in certain economies.
Keywords: government debt, fiscal policy, fiscal sustainability, Bohn’s test
JEL: E62, F34, F41, H6, H68
Acknowledgments: The author is grateful to reviewers for constructive criticism of the manuscript.
For citation: Alekhin B.I. Russia’s Fiscal Sustainability. What Bohn’s Test Has Revealed. Financial Journal, 2019, no. 5, pp. 21–36 (In Russ.). DOI: 10.31107/2075-1990-2019-5-21-36.
Mariia A. Elkina
The Impact of Indirect Tax Rates Cut on Inflation: Evidence From Russia, p. 37-49
The article analyzes the inflationary effect of the value added tax rate cut and abolishment of the sales tax in Russia in 2004. For this purpose, a panel regression with inflation rates of 39 CPI items is estimated for the period from 2000 to 2007. The results indicate that during the period of the indirect tax reform there was a significant divergence between items which experienced a tax rate change and those which did not. This effect starts before the implementation of tax rate changes, lasting for three months and amounting to −0.3 p.p. each month. The overall impact on inflation is estimated at − 0.6–0.7 p.p. in annual terms. Hence, the indirect tax pass-through was far from being full in 2004. Consequently, producers and retailers were the ones who gained the most from the tax rate cut in 2004. Empirical evidence indicates that a cut in indirect tax rates is rather a way to support producers and retailers than a policy which can stimulate consumption.
Keywords: pass-though effect, value added tax, sales tax, indirect taxes, inflation, consumer prices, fiscal policy
JEL: H20, E62
For citation: Elkina M.A. The Impact of Indirect Tax Rates Cut on Inflation: Evidence From Russia. Financial Journal, 2019, no. 5, pp. 37–49 (In Russ.). DOI: 10.31107/2075-1990-2019-5-37-49.
Victoria V. Priobrazhenskaya
The Impact of Digital Economy on Accounting Competencies, p. 50-63
Professional competency transformation in the digital economy development process is inextricably linked with the future profession configuration. The situation is complicated by uncertain profession prospects due to conflicting forecasts and the lack of comprehensive system solutions in this area. The research objective is to analyze the accounting development prospects based on the general neoclassical structural concept and to outline the directions for competencies development in each area of accounting: theory, practice, and methodology. To study the accounting profession prospects in terms of relevant digital economy options, we used the epistemology and science philosophy methodology, the concepts of economic theory, and political economy provisions. The main result is the provision on the rising value of accounting competencies influenced by the widespread use of digital technologies. This conclusion is based on the following factors. Descriptive methodology is consolidated at the national and international levels, as a result of which the value of professional judgment increases. Digital technologies reduce routine work and stimulate the development of creative accounting activities. This entails growth in professional judgment competence, which extends to the entire neoclassical scientific organization triad. In the theoretical scope, digital technologies stimulate competencies in the form of developed knowledge, providing a holistic view of economic relation patterns, and explaining the methods, techniques and rules for accounting process implementation. In the practical field, digitization produces digital skills development. Exemption from the routine accounting practice leads to labor process restructuring and an increase in the intellectual component and value of mental abilities. In the methodology field, knowledge at the junction of fundamental theoretical accounting issues with a simultaneous confident understanding of the digital economy functioning (as a whole and across its individual elements) is supposed to be in demand. The proposed systematic approach removes uncertainty and opens up accounting prospects, makes it possible to outline the directions of relevant specialist training in the field of mental digital economy reflection, and contributes to enhancing the accounting profession’s prestige.
Keywords: digital economy, accounting, accounting profession, neoclassical accounting concept
JEL: M40, M41
For citation: Priobrazhenskaya V.V. The Impact of Digital Economy on Accounting Competencies Development. Financial Journal, 2019, no. 5, pp. 50–63 (In Russ.). DOI: 10.31107/2075-1990-2019-5-50-63.
Kristina V. Shvandar, Anastasia A. Anisimova
World Experience of Pension Guarantees in Voluntary Pension Plans, p. 64-73
The article deals with the provision of pension guarantees in voluntary pension systems. The importance of guarantees is due to the increasing role of non-state pension systems in international practice. World experience shows that problems within the framework of voluntary pension schemes are largely related to the issue of trust in the pension system. Solving the latter is interrelated with the necessity of consideration of guarantees. The article analyzes the pension guarantees in the legislation of different countries in order to identify opportunities to use international experience in legal regulation for the development of the pension system in the Russian Federation. The paper describes the fiduciary standards in voluntary pension schemes in different countries, as well as the principles of the OECD in financial protection of pension plan participants, implemented in the national legislation of the countries. The issue of investment return guarantees is particularly important in the context of voluntary pension schemes with defined contributions. The analysis helps to identify that Russia needs an introduction of legal frameworks of guarantees regulation to increase the number of participants in the voluntary pension system. The guarantee in voluntary pension schemes will be critical if the automatic enrollment mechanism is introduced in the Russian Federation as part of the system of individual pension capital. In particular, an important point is the introduction of a system of guarantees for participants’ rights as a concept in the Russian private pension system, as well as the implementation of basic legal principles and characteristics of this system.
Keywords: investment return guarantees, automatic enrollment mechanism, fiduciary standards, voluntary pension plans, licensing of pension funds
JEL: H20, E62
For citation: Shvandar K.V., Anisimova A.A. World Experience of Pension Guarantees in Voluntary Pension Plans. Financial Journal, 2019, no. 5, pp. 64–73 (In Russ.). DOI: 10.31107/2075-1990-2019-5-64-73.
Anton I. Votinov, Samvel S. Lazaryan, Vyacheslav N. Ovchinnikov
Regression-Based Decomposition of Income Inequality Factors in Russia, p. 74-89
The purpose of this study was to identify the factors of income inequality in Russia using RLMSdata (2009–2016). In this paper inequality refers to differentiation in equivalent household income, adjusted for the cost of the consumer basket in the regions of Russia. To solve the problem, we used regression decomposition of the inequality index. According to the results, such factors as “the share of children in households”, “the size of households” and “the share of non-working adults” had the largest positive contribution to the inequality index. The “region of residence” factor, which is usually considered as the key factor of inequality in Russia, had an equalizing effect. This is due to the fact that we analyzed differentiation in the standard of living. Indeed, we calculated the dependent variable of income, adjusted for the cost of the consumer basket in the relevant region. Thus, the level of inequality was not affected by the regional attribute, but rather by the differentiation of other significant factors of the regions. The obtained results can be used for a deeper study of the causes of changes in inequality.
Keywords: income inequality, household, regression decomposition, quartile
JEL: D31, C51
For citation: Votinov A.I., Lazaryan S.S., Ovchinnikov V.N. Regression-Based Decomposition of Income Inequality Factors in Russia. Financial Journal, 2019, no. 5, pp. 74–89 (In Russ.). DOI: 10.31107/2075-1990-2019-5-74-89.
Marina B. Trachenko, Anastasia V. Kozhanova
Specifics of Startup Financing at Different Stages of the Life Cycle, p. 90-103
Given the limited bank lending instruments, there is an active expansion of the financial intermediary market and financial instruments for startups, which are the main subjects of development for any country’s innovative economy. This creates an increased interest in the study of the specifics of these companies’ financing structure. The purpose of this study is to systematize the sources, forms and instruments of startup financing depending on the life cycle stage, as well as to examine their application in Russian practice. The methods used include bibliographic and logical analysis, comparison, synthesis and systematic approach, classification, and mathematical methods of statistical data processing. The result is a developed classification system for startup financing sources where the most salient subjects and providers of the investment process, the tools they use, and forms of financing have been identified for each stage of the startups’ life cycle. The presented classification can be applied in developing programs, strategies, and regulatory documents both by the government and private companies. A comparative analysis of the startup financing structure at the seed and early stages in Russia and Europe has revealed a number of significant differences: the largest share in Europe belongs to business angels, as opposed to crowdfinancing and venture funds in the Russian Federation, the share of the latter growing while the share of business angels is decreasing; in addition, in Russia, state investments in startups through both venture funds and corporations with state share have considerable weight.
Keywords: startup, startup life cycle, startup financing, risk, innovation company, crowdfinancing, venture investments
JEL: G21, G23, G24, O30
For citation: Trachenko M.B., Kozhanova A.V. Specifics of Startup Financing at Different Stages of the Life Cycle. Financial Journal, 2019, no. 5, pp. 90–103 (In Russ.). DOI: 10.31107/2075-1990-2019-5-90-103.
Ivan A. Belarev, Elena B. Starodubtseva
ICO as a New Form of Financing of Innovative Business, p. 104-118
Nowadays, innovative business is looking for new ways of raising capital for its financing. More traditional sources of financing are not always available, or are quite expensive due to the high risk involved. However, they are being replaced by new financing instruments. One of these is the issuing of tokens, which are then placed on the stock exchange, thereby attracting the necessary capital in exchange for cryptocurrency. Despite the fact that ICO has appeared relatively recently, it has made it possible to attract a significant amount of money exceeding the volume of venture financing, which is a more traditional instrument of financing for innovative business. The purpose of this article is to analyze this financing instrument, and to identify problems and prospects for its development in the short term. The essence of the instrument in question has some similarities with IPO, although, in contradistinction to IPO, investors of ICO do not receive the right to participate in capital and the right to receive dividends. Entrepreneurs are also free from debt obligations. Herewith, the process of issuing tokens is accompanied by a kind of prospectus, and the offering takes place both on the stock exchange and on the over-the-counter market. The short period of existence of this instrument leads to a number of problems, among which the most significant one is the absence of unified regulation in terms of recognition and classification of tokens, licensing, evaluation, auditing etc. However, in the coming years, the demand for this form of financing will be increasing, as shown by econometric analysis.
Keywords: innovative business, ICO, tokens, cryptocurrency, capital, financing
JEL: F21, F37
For citation: Belarev I. A. Starodubtseva E. B. ICO as a New Form of Financing of Innovative Business. Financial Journal, 2019, no. 5, pp. 104–118 (In Russ.). DOI: 10.31107/2075-1990-2019-5-104-118.
Alexander M. Karminsky, Ekaterina V. Seryakova
Assessment of Cross-Border Transmission of Systemic Financial Risk in EU Countries, p. 119-129
Amid global financial instability timely identification and propagation of systemic risks within both national and international banking systems becomes essential. It implies that it is highly important to assess not only inner factors of systemic banking risk and channels of its propagation, but also external sources which are due to cross-boarder spread of systemic banking risks. This article focuses on researching cross-boarder mechanism of systemic risks spread using method of decomposition of the variance of errors of VAR-models basing on monthly aggregated country-level indices of financial stress for EU-countries (CLIFS: Country-Level Index of Financial Stress). This investigation seems to be acute for coordinating macroprudential policies of national regulators of EU- countries and mastering macroprudential policy of Bank of Russia due to high globalization of financial markets of EU-countries and growth of financial innovations. The matrix of connectedness of 27 countries belonging to EU allows to obtain index of systemic connectedness (84 %), which reflects high dependence of each country on external shocks transferred from other countries-members of EU. Indices of net connectedness allow to divide countries into two groups: net-acceptors and net-donors of systemic risks. Empirical analysis has confirmed the hypothesis that countries subject more to inner shocks — Greece, Cyprus, Bulgaria and Croatia- have really survived starting from 2008 banking crises, explained with internal imbalances of banking systems.
Keywords: systemic risks, banking system, transmission of banking risks, financial stability
JEL: Е69, F30, G17, G21, G32
For citation: Karminsky A.M., Seryakova E.V. Assessment of Cross-Border Transmission of Systemic Financial Risk in EU Countries. Financial Journal, 2019, no. 5, pp. 119–129 (In Russ.). DOI: 10.31107/2075-1990-2019-5-119-129.