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Financial Journal Vol.16 No.5 2024

CONTENTS

I.V. Nikonov, M.G. Arustamyan, O.R. Mukhametov, A.I. Votinov, S.A. Radionov
Transformation of Public Debt Structure by Creditors in Central Asian and South Caucasus Countries
, p. 8-26
Abstract
The rapid growth of public debt in developing countries in recent years and the increasing risks associated with this process emphasize the importance of research in this area. The article examines one of the key aspects of public debt management — the structure of creditors’ debt portfolio. The object of the study is the public debt of four countries of Central Asia and three countries of the South Caucasus. The states of this region are important foreign economic partners of Russia, their contribution to mutual trade and realization of joint projects is growing. Their role in the global and regional economy is also expanding, including participation in major transport and logistics projects designed to increase the connectivity of Eurasia. The study is based on the data of international organizations on the total volume of public debt, debt to individual external creditors and the dynamics of macroeconomic indicators. The article examines changes in the structure of the main groups of creditors for each country over three long-term periods and analyzes similarities and differences in the observed structural shifts. It also decomposes the indicator of public debt dynamics and estimates the contribution of the economic growth factor and the effects of changes in countries’ debt to certain groups of creditors. The study identified the following key trends in public debt structural changes: 1) the declining role of bilateral loans from developed and developing countries since the 2000s; 2) the continued strong influence of debt raised from international financial organizations and development banks in most countries throughout the period under study; 3) in a number of countries, a gradual increase in market sources of debt financing (domestic and Eurobonds); the increasing role of loans from China — in the Kyrgyz Republic and the Republic of Tajikistan, etc. The study identifies reasons for these structural changes, and concludes with a discussion of the risks associated with the observed shifts in the structure of public debt.
Keywords: public debt, external debt, creditor structure, Central Asia, South Caucasus
JEL: F34, H63
For citation: Nikonov I.V. et al. (2024). Transformation of Public Debt Structure by Creditors in Central Asian and South Caucasus Countries. Financial Journal, 16 (5), 8–26 (in Russ.). https://doi.org/10.31107/2075-1990-2024-5-8-26.
© Nikonov I.V. et al., 2024

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V.Yu. Dodonov
Inter-budget Relations in Kazakhstan: State and Main Trends
, p. 27-42
Abstract
Balance of the state budget is one of the necessary conditions for the effective functioning of the budget system of the country. This balance is largely determined by inter-governmental fiscal relations and the resulting redistribution of financial resources between the central, regional and local levels of the budget system. Inter-budget relations in Kazakhstan over the past two decades have undergonesignificant changes, which further increased the relevance of research on this topic. Such aspects of inter-budget relations as the increase in the volume and specific weight of transfers from the republican budget to the budgets of lower state bodies, the growth of the number of subsidized regions, the reduction of revenues to the republican level from the regional level, caused special attention to this problem in the budget process of Kazakhstan. The article examines the state and development of inter-budget relations in Kazakhstan in terms of these aspects in order to identify the main trends of their transformation and assess their impact on the budget process. The article analyses the main parameters of inter-budget relations in Kazakhstan, reveals trends in the role of subsidies and exemptions from local budgets, and considers the dynamicsof the number of subsidized regions and donor regions of the republican budget. It is noted that there is no noticeable improvement in the situation at the level of regional budgets, despite the increase in their revenue base due to the transfer of a number of tax revenues to the local level in 2020. Based on the analysis, the author concludes that the situation in the sphere of inter-budget relations in Kazakhstan is deteriorating, which is manifested in a constant decrease in the number of donor regions and an increase in the number of regions receiving subsidies, an increase in the share of subsidies in the revenues of local budgets, and a decrease in the share of exemptions from local budgets in the state budget revenues. It is also noted that the imbalance of inter-budget relations leads to the complication of the budget process at the republican level, which requires the adoption of measures to further increase the financial independence of the regions.
Keywords: state budget, Inter-budget relations, local budgets, subventions, exemptions
JEL: H77
Funding: the study was financially supported by grant No. IRN AR23489872 “Monitoring of interethnic relations in the southern regions of Kazakhstan” of the Committee of Science of the Ministry of Science and Higher Education of the Republic of Kazakhstan.
For citation: Dodonov V.Yu. (2024). Inter-budget Relations in Kazakhstan: State and Main Trends. Financial Journal, 16 (5), 27–42 (in Russ.).
https://doi.org/10.31107/2075-1990-2024-5-27-42.
© Dodonov V.Yu., 2024

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M.S. Makushkin
Yield Factors of Additional Tier 1 Bonds, p. 43-59
Abstract
Additional Tier 1 bonds (AT1 bonds) are hybrid financial instruments issued by banks under Basel III. In case of a threat to the financial stability of an institution, these bonds can be converted into equity or written down to help the bank meet capital requirements. AT1 bonds are designed to insure a bank against a potential capital shortfall and minimize the need for a regulatory bail-out. AT1 bonds gained new attention after the collapse of Credit Suisse (CS), when all outstanding AT1 bonds issued by the bank were written down to zero. This paper provides an overview of AT1 capital, compares the main types of AT1 bonds and describes their most common features. In addition, it quantifies the risk premium in AT1 bond yields and identifies the main factors underlying this premium. The analysis is supported by real data on AT1 issuance in Europe. It is shown that in the primary market investors demand a significant premium from banks for the additional risk embedded in AT1 bonds. The size of the premium depends mostly on issuer-specific factors such as issuer’s credit risk, capital ratio, stock volatility and asset size. On the contrary, security design turns out to be a less important pricing factor. The author compares the results before and after the CS crash and concludes that the CS AT1 write-down did not directly affect the pricing principles in the market. The results of the research may be useful both for investors looking for yield pickup in financial sector and for banks working on the optimal design for their AT1 bonds.
Keywords: AT1 bonds, contingent convertible bonds, bank capital, yield, Basel III
JEL: G12, G13, G21
For citation: Makushkin M.S. (2024). Yield Factors of Additional Tier 1 Bonds. Financial Journal, 16 (5), 43–59 (in Russ.).
https://doi.org/10.31107/2075-1990-2024-5-43-59.
© Makushkin M.S., 2024

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V.V. Gromov
Establishment of Special Economic Zones after the Moratorium: Motives, Trends, Patterns
, p. 60-77
Abstract
Improvement of the investment climate is one of the main priorities of the Russian tax policy, in which special economic zones (SEZ’s) play a significant role. The pace of their creation has increased significantly in recent years. The main idea, as always, is to attract investment. However, the more such zones appear, the more obvious becomes the gap in defining the strategic role of the SEZ regime, which has already been introduced in dozens of Russian regions, but still lacks a clear conceptualization. Moreover, the revival of interest in SEZ’s contrasts sharply with the recent moratorium on their creation. Such dramatic changes have underlying motives, the understanding of which is necessary to avoid a superficial view of investment attraction policies. Since they are currently of particular importance for ensuring macroeconomic stability, the purpose of the article is to identify the problems that may hinder the effective application of the SEZ regime in Russia. On this basis, the article systematizes the prerequisites for lifting the moratorium, establishes patterns and explains trends in the creation of SEZ’s, as well as gives proposals for the development of the concept of economic zoning.
Keywords: investment, investment climate, SEZ, preferential tax treatment, special economic zone, region, tax policy, tax regime
JEL: E62, L52, R11
Funding: The article was written on the basis of the RANEPA state assignment research program.
For citation: Gromov V.V. (2024). Establishment of Special Economic Zones after the Moratorium: Motives, Trends, Patterns. Financial Journal, 16 (5), 60–77 (in Russ.). https://doi.org/10.31107/2075-1990-2024-5-60-77.
© Gromov V.V., 2024

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E.N. Timushev
Distribution of Federal Equalization Grants: Assessing the Impact of Major Changes
, p. 78-96
Abstract
The purpose of the work is to establish how the main changes in the methodology of distribution of grants from the federal budget for fiscal capacity equalization affected the budget revenues of the constituent entities of the Russian Federation. The relevance of the study is due to the fact that the way of distribution of non-earmarked interbudget transfers affects the effectiveness of the model of interbudget relations. The modeling of the values of the transfers allocated annually to each constituent entity of the Russian Federation has been performed, demonstrating the adequacy of the developed methodology. The consequences of all major changes in the methodology of allocation of subsidies, such as introduction of restrictions on the reduction and increase of transfers, launching the mechanism of the model budget, reducing the equalization criterion and adding the coefficient of the level of social burden to the index of budget expenditures, have been calculated. It was found that the changes in the distribution methodology were progressive, that is, the higher was the fiscal capacity before the distribution, the smaller was the annual increase in equalization grants as a result of the changes. In other words, over time, more and more funds were allocated to the least prosperous regions. The regions of the North Caucasus Federal District benefited the most from the changes, and in general, all the innovations, except for restrictions on the reduction and increase in subsidies, had approximately the same spatial effect in terms of the composition of the “winning” regions. At the same time, it is more difficult to draw conclusions about the “losing” regions, since they have different levels of fiscal capacity.
Keywords: equalizing transfers, model budget, equalization criterion, interbudget transfers, budget expenditure index
JEL: H77
Funding: The manuscript is based on the results of research carried out within the framework of the state assignment of RANEPA.
For citation: Timushev E.N. (2024). Distribution of Federal Equalization Grants: Assessing the Impact of Major Changes. Financial Journal, 16 (5), 78–96 (in Russ.). https://doi.org/10.31107/2075-1990-2024-5-78-96.
© Timushev E.N., 2024

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A.L. Osmolovskaya-Suslina, S.R. Borisova
Simplified Taxation System: First Estimates of 2024 Changes in Tax Legislation
, p. 97-108
Abstract
Changes to the simplified taxation system (STS) introduced in the course of the tax system fine-tuning will significantly alter its design: income limit requirements will be expanded and STS payers will be recognized as VAT payers. The objective of this study is to find out what percentage of STS and CIT payers will be affected by these changes. For this purpose, a distribution of STS and CIT payers by income level was plotted. Information from tax forms of the Russian Federal Tax Service, Registers of SMEs and the SPARK database for the period 2019–2022 was used as input data. It was found that there is a shift in the structure of both STS and CIT taxpayers towards lower incomes: about 70% of CIT payers and about 90% of STS payers earn less than RUB 60 million per year. The analysis revealed that for 85% of STS payers the reform will be neutral, while for 9% the situation will slightly worsen. The winners of the reform will be those companies that will switch from CIT to STS. This transition will be formally available for 87% of CIT payers, and most of them will switch due to the possibility to pay VAT. Expansion of income limits under STS may become a decisive factor for only 10% of CIT payers.
Keywords: SME, simplified tax system, CIT, tax reform, taxpayers
JEL: H2, H71, K34
For citation: Osmolovskaya-Suslina A.L., Borisova S.B. (2024). Simplified Taxation System: First Estimates of 2024 Changes in Tax Legislation. Financial Journal, 16 (5), 97–108 (in Russ.). https://doi.org/10.31107/2075-1990-2024-5-97-108.
© Osmolovskaya-Suslina A.L., Borisova S.B., 2024

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V.V. Klimanov, A.A. Mikhaylova
Improving Russia’s Tax System in 2024: Сross-country Comparisons and Regional Projection
, p. 109-120
Abstract
The article discusses the additional adjustment of the tax system carried out in the Russian Federation in 2024, primarily in terms of changes in the rates of corporate income tax and personal income tax. Based on the analysis, a conclusion is made about the comparability of the levels of these taxes in Russia and in some countries of the Organization for Economic Cooperation and Development. It is shown that the centralization of additional revenues arising from the ongoing improvement of the tax system is more effective than the potential redistribution of these revenues to regional budgets due to the high concentration of corporate income tax and personal income tax in the wealthiest regions of Russia.
Keywords: tax policy, progressive taxation, personal income tax
JEL: H21, H71, H87
Funding: The manuscript is based on the results of the research carried out within the framework of the RANEPA state assignment.
For citation: Klimanov V.V., Mikhaylova A.A. (2024). Improving Russia’s Tax System in 2024: Сrosscountry Comparisons and Regional Projection. Financial Journal, 16 (5), 109–120 (in Russ.). https://doi.org/10.31107/2075-1990-2024-5-109-120.
© Klimanov V.V., Mikhaylova A.A., 2024

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D.Yu. Fedotov
Taxes and Customs Duties as Instruments of Oil Rent Withdrawal to the Russian Budget Revenue
, p. 121-139
Abstract
For countries focused on the extraction and processing of natural resources, including Russia, the crucial task is to ensure the rational extraction and distribution of natural rent. The tax model applied to natural rent should facilitate its optimal allocation to the budget without undermining the motivation of resource users to invest. The purpose of this study is to gauge the extent of oil rent extraction to the Russian budget and to propose strategies to improve the efficiency of oil rent redistribution to the state budget. According to the author’s hypothesis, export customs duties, compared to the mineral extraction tax, are more effective in achieving the desired redistribution of funds from resource users to the budget. The analysis shows that from 2005 to 2022 up to 87% of the oil rent received in Russia was extracted through rent payments to the state budget. However, in recent years the degree of oil rent extraction has decreased to 56%. This decline can be attributed to the tax maneuver initiated in Russia since 2015, entailing the reduction and eventual abolition of export customs duties and an increase in the mineral extraction tax rate. The results obtained indicate a decline in effectiveness of rent-based taxation in Russia due to the decreasing fiscal significance of rent payments. Furthermore, their regulatory function, designed to stimulate taxpayers to make investments, has weakened. These findings provide valuable insights for shaping fiscal policies and lay the foundation for further research in this area.
Keywords: tax, oil rent, customs duty, mineral extraction tax, tax maneuver, investment, correlation analysis
JEL: E62, H21
Funding: The article is based on the results of research carried out at the expense of budgetary funds under the state assignment of the Financial University under the Government of the Russian Federation.
For citation: Fedotov D.Yu. (2024). Taxes and Customs Duties as Instruments of Oil Rent Withdrawal to the Russian Budget Revenue. Financial Journal, 16 (5), 121–139 (in Russ.). https://doi.org/10.31107/2075-1990-2024-5-121-139.
© Fedotov D.Yu, 2024

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Financial Journal Vol.16 No.4 2024

CONTENTS

V.Yu. Mishina, L.I. Khomyakova
Current Trends in the Development of Financial Infrastructure and Transformation of the Foreign Exchange Market in Russia
, p. 8-23
Abstract
The article analyzes the main changes in the Russian currency market in the context of modern realities — unprecedented geopolitical pressure, changes in the financial, currency and payment landscape under the influence of sanctions. The purpose of the article is to study the directions of ruble settlements, financial integration and trade in currencies of friendly countries in response to structural changes in the Russian currency market. A significant decrease in the share of the dollar in international payments, reserves and transactions in the foreign exchange market is noted. Much attention is paid to the current trends of dedollarization and diversification of financial markets, which the exchange infrastructure has developed under the influence of difficult external conditions. The authors conducted a study to answer the debatable question of whether the rise in popularity of national currencies was natural or accidental. They support their conclusions with historical statistical data on transactions in the foreign exchange market.
Keywords: foreign exchange market, currency market, conversion operations, settlements, ruble, integration, friendly countries
JEL: F02, F31, G15, G20
For citation: Mishina V.Yu., Khomyakova L.I. (2024). Current Trends in the Development of Financial Infrastructure and Transformation of the Foreign Exchange Market in Russia. Financial Journal, 16 (4), 8–23 (In Russ.). https://doi.org/10.31107/2075-1990-2024-4-8-23.
© Mishina V.Yu., Khomyakova L.I., 2024

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T.V. Saakyan
Regulatory and Methodological Support for Tracking the Results of R&D Funded with Federal Budget Subsidies
, p. 24-40
Abstract
The article considers approaches to regulatory and methodological support of tracking the results of research, development and technological works for civil purposes (R&D) funded with subsidies provided to legal entities from the federal budget, including grants in the form of subsidies for R&D from the federal budget to legal entities (except for state (municipal) institutions), individual entrepreneurs, individuals — producers of goods, works and services (hereinafter — subsidies to legal entities), — at all stages of the budget process: budget planning, budget execution, reporting on budget execution. The analysis of the above issue's regulation in relation to this type of source of financial support is presented in comparison with other types of budget expenditures provided for R&D (subsidies to state institutions for the fulfillment of the state tasks perform works and procurement of works to meet state needs). The practical application of the results of the analysis makes it possible to formulate proposals for the development of unified approaches to the management of R&D expenditures by monitoring the achievement of results (and, in the long term, their application) and thereby to improve the transparency and quality of budget management in the field of scientific research at all stages of the budget process.
Keywords: budget subsidies to legal entities, results of subsidies, research, development and technological works for civil purposes, subsidies' provision monitoring, research and development works for civil purposes, experimental design works for civil purposes
JEL: G38, H20, H61, O32, O38
Funding: The article was prepared based on the results of research carried out at the expense of budgetary funds under the state assignment to the Financial Research Institute.
For citation: Saakyan T.V. (2024). Regulatory and Methodological Support for Tracking the Results of R&D Funded with Federal Budget Subsidies. Financial Journal, 16 (4), 24–40 (In Russ.). https://doi.org/10.31107/2075-1990-2024-4-24-40.
© Saakyan T.V., 2024

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A.I. Lukashov
Transformation of the Organizational and Functional Model of State and Municipal Financial Control
, p. 41-60
Abstract
The article is devoted to the current organizational and functional model of state and municipal financial control. The author analyzes the powers of external and internal state and municipal financial control bodies and concludes that they are similar. He also summarizes the results of the analysis of the execution of budgetary powers by state and municipal financial control bodies, which are executive bodies of the subjects of the Russian Federation or local administrations, for the period from 2018 to 2023, conducted annually by the Federal Treasury. This allows to identify systemic problems that require improvement of the organizational and functional model of state and municipal financial control. The article contains proposals for the transformation of the existing control model.
Keywords: state and municipal financial control, Accounting Chamber of the Russian Federation, Federal Treasury, organizational and functional model
JEL: Е62, Н61, Н72, G28, P35
For citation: Lukashov A.I. (2024). Transformation of the Organizational and Functional Model of State and Municipal Financial Control. Financial Journal, 16 (4), 41–60 (In Russ.). https://doi.org/10.31107/2075-1990-2024-4-41-60.
© Lukashov A.I., 2024

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A.M. Matevosova
The Impact of the Regional Public Debt Level on Regional Economic Growth Rates in Russia
, p. 61-81
Abstract
This article estimates the impact of the level of regional public debt on the rate of regional economic growth in the context of socio-economic development of Russian regions. The results obtained are important for determining the optimal level of regional public debt in order to increase the efficiency of the Russian regional budget policy. The level of regional public debt is understood in this study as the ratio of regional public debt to its GRP. Considering the heterogeneity of regions in the modeling process, the subjects were clustered by the level of socio-economic development using the k-means algorithm. Further, the results of clustering were used in econometric models to identify differences in the level of regional public debt impact on the economic growth of regions depending on the level of their socio-economic development. Using panel data models for the subjects of the Russian Federation, the negative impact of the public debt level on regional economic growth rates was revealed for regions with a low and medium levels of socio-economic development. By implementing the Hansen procedure for the subjects of these clusters, the threshold level of regional public debt was found. It is equal to 2.36% of GRP, above which the neutral impact of public debt on economic growth is replaced by a negative one. For regions with a high level of socio-economic development it was found that changes in the level of public debt are neutral in relation to regional economic growth. These results allowed us to formulate recommendations for regional budget policy.
Keywords: public debt, economic growth, clustering, panel data model, threshold regression, regional budget policy
JEL: H63, С38, С33, O47
Acknowledgments: The author is grateful for the advisory assistance to the organizers, experts and jury of the research projects competition of the Accounting Chamber of the Russian Federation and the Financial University under the Government of the Russian Federation among students, postgraduates and young researchers "Applying an evidence-based approach to the evaluation of government programs, projects, measures".
For citation: Matevosova A.M. (2024). The Impact of the Regional Public Debt Level on Regional Economic Growth Rates in Russia. Financial Journal, 16 (4), 61–81 (In Russ.). https://doi.org/10.31107/2075-1990-2024-4-61-81.
© Matevosova A.M., 2024

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K.V. Shvandar, A.A. Anisimova, N.Yu. Kamenskaia
Trends in the Architecture of the Most Sustainable Multi-tier Pension Systems
, p. 82-94
Abstract
The article presents a study of the unfunded (distributive) and funded (accumulative) components in multi-level pension systems in different countries around the world. The existing foreign practices of building pension systems are reviewed. It is proved that high sustainability indicators are achieved in those countries where a combination of the unfunded and funded components is used. The relevance of the topic is conditioned by the accrued problems in the pension sector, largely associated with the aging of the population and low birth rate. To conduct the study, the authors turned to countries with multi-tier, most stable pension systems, such as Denmark, the Netherlands, Australia, Sweden, Canada, New Zealand, Finland and Latvia. As a result, a number of features of the pension systems under consideration were identified. Within the state level of pension systems, the amount of payments depends on various criteria and conditions, the use of which is aimed at making payments more targeted. In countries where occupational pension schemes are developed, participation in them is mandatory for employees and employers. At the same time, voluntary pension schemes are used much less frequently by the population of the countries under study.
Keywords: pension systems, professional pension plans, voluntary pension schemes, state pensions, funded pensions
JEL: H55, J26
For citation: Shvandar K.V., Anisimova A.A., Kamenskaya N.Yu. (2024). Trends in the Architecture of the Most Sustainable Multi-tier Pension Systems. Financial Journal, 16 (4), 82–94 (In Russ.). https://doi.org/10.31107/2075-1990-2024-4-82-94.
© Shvandar K.V., Anisimova A.A., Kamenskaya N.Yu., 2024

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M.S. Faizulin
Sentiment and Herd Behavior of Private Investors: A Cluster Analysis of the Russian Stock Market
, p. 95-113
Abstract
In this paper, the sentiment of private investors and the divergence of opinions of users of online investment platforms are analyzed as factors in the emergence of herd behavior on the stock market in different clusters. This clusters are formed on the basis of stock exchange information on shares of Russian issuers. The relevance of the study lies in determining the significance of consensus periods and their impact on the behavior of different groups of investors on the Russian stock market depending on different levels of risk taking by investors. Based on the Russian stock market data for the period from 2019 to 2023, 66 discussed Russian stocks were analyzed. To conduct sentiment analysis, an algorithm was applied to collect and automatically classify textual data using machine learning methods. As proxies for private investor sentiment, metrics of logarithmic sentiment and market-wide divergence of opinions on the stocks under discussion were constructed. The testing of the research hypotheses was based on the implementation of clustering and quantile regression analysis methods. As a result, the significant role of divergence of opinions of Internet users in the formation of herd behavior of private investors on shares with lower average return and risk level was determined. It was also found that asset clustering helps to determine the opposite behavior of investors on stocks with higher volatility level. Consensus of opinions in the market is a signal to deviate from the general market trend. Finally, the test of the hypothesis about the significant influence of investor sentiment did not provide sufficient evidence that this kind of sentiment is important for determining herd behavior in the market.
Keywords: herd behavior, divergence of opinions, investor sentiment, Russian stock market
JEL: G41, G11
For citation: Faizulin M.S. (2024). Sentiment and Herd Behavior of Private Investors: A Cluster Analysis of the Russian Stock Market. Financial Journal, 16 (4), 95–113 (In Russ.). https://doi.org/10.31107/2075-1990-2024-4-95-113.
© Faizulin M.S., 2024

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A.S. Larionov
Venture Capital Investment in Israel: Impact on the Economy and Technological Development
, p. 114-133
Abstract
Israel is one of the world's leading countries in attracting venture capital, which has largely determined Israel's success in building an innovative economy. This study analyzes the dynamics of venture capital investment in Israel from 1991 to 2021 and assesses the correlation between the level of such investment and the level of foreign direct investment, as well as the impact of venture capital investment on the growth of the technological sector of GDP. It is revealed that venture capital investment stimulates the growth of the high-tech sector of Israel’s GDP, and this provides a cumulative positive effect on other sectors of the economy. The stimulating effect of venture capital investment is reflected in an increase of exports of goods and services, citizens’ incomes and the growth of the country’s GDP. The relevance of the topic of the article is confirmed by the immediacy of the problem of attracting venture capital in the Russian Federation and in most developing countries of the world: for them, there is an objective need to resolve the issues related both to the state policy in the field of attracting venture capital and to the creation of infrastructure for the development of the technological innovation sector of the economy.
Keywords: venture capital investments, venture capital funds (VC funds), startups, R&D, high-tech exports, IPOs
JEL: G21, G23, G24, O30
For citation: Larionov A.S. (2024). Venture Capital Investment in Israel: Impact on the Economy and Technological Development. Financial Journal, 16 (4), 114–133 (In Russ.). https://doi.org/10.31107/2075-1990-2024-4-114-133.
© Larionov A.S., 2024

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Financial Journal Vol.16 No.3 2024

CONTENTS

M.V. Petrov
The Impact of Geopolitical Tensions on International Capital Flows
, p. 8-22
Abstract
The study examines the impact of geopolitical tensions, which have increased sharply in recent times, on international capital flows. It shows that geopolitical tensions affect cross-border investment flows through three main channels: increased geopolitical risks that encourage international investors to reduce investments in countries with different foreign policies; tighter controls on incoming FDI in many countries to ensure national security; and financial sanctions imposed by Western countries to put pressure on other states. Based on the analysis of investment relations between the United States and China, the contradictions between which are the main source of geopolitical tension in the world, the author confirms the conclusion that the influence of geopolitical factors on capital flows between the countries has increased since the second half of the 2010s. However, the study substantiates that the emerging fragmentation of cross-border capital flows can have not only negative, but also positive consequences for the global economy and finance. The compression of capital flows between the countries of the global North and South may push the latter to establish closer integration ties in the financial sector, create financial infrastructure independent of the West, focused on the needs of developing countries, and accelerate the internationalization of their currencies. As a result, these processes could weaken the dominance of Western countries in the global financial system and facilitate its transition to a more equitable multipolar configuration.
Keywords: international capital flows, geopolitical tensions, geopolitical risks, foreign direct investments, portfolio investments
JEL: F02, F21, F51
For citation: Petrov M.V. (2024). The Impact of Geopolitical Tensions on International Capital Flows. Financial Journal, 16 (3), 8–22 (In Russ.). https://doi.org/10.31107/2075-1990-2024-3-8-22.
© Petrov M.V., 2024

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N.E. Barbashova, A.N. Komarnitskaya
Problems and Prospects of Inter-budget Relations in Russia’s Urban Agglomerations
, p. 23-39
Abstract
The development of urban agglomerations is an urgent direction of the state policy of the Russian Federation in the field of territorial development. The purpose of this article is to identify current problems in the sphere of budgetary interaction within urban agglomerations and to develop approaches to building an optimal system of inter-budget relations in different agglomeration models. Among them we can distinguish the traditional model (in which the core is an urban district, the satellite zone — municipalities located in the same subject of the Russian Federation), the interregional model (municipalities forming an agglomeration are located in several subjects of the Russian Federation) and the model of agglomeration formed around a city of federal significance. The result of the study is a set of proposals for building interrelated measures in the field of inter-budget relations aimed at creating conditions to stimulate agglomeration processes. The proposals include recommendations for certain amendments and additions to the current budgetary legislation in order to adapt the instruments of inter-budget regulation to the needs of territorial development.
Keywords: agglomerations, agglomeration development, inter-budget relations, horizontal transfers, horizontal budget loans
JEL: H70, H77
Funding: The article was written on the basis of the RANEPA state assignment research program.
For citation: Barbashova N.E., Komarnitskaya A.N. (2024). Problems and Prospects of Inter-budget Relations in Russia’s Urban Agglomerations. Financial Journal, 16 (3), 23–39 (In Russ.). https://doi.org/10.31107/2075-1990-2024-3-23-39.
© Barbashova N.E., Komarnitskaya A.N., 2024

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L.V. Polezharova, M.R. Pinskaya, E.Yu. Vinogradova
Improving Russia’s Tax Policy in the Sphere of International Taxation
, p. 40-50
Abstract
Given the need for the Russian Federation to adapt to sanctions and increase its resilience to new challenges, there is an urgent need to improve tax policy in the sphere of international taxation. This article proposes several conceptual approaches to protecting Russia's tax interests and ensuring its sovereign rights in the international tax sphere. In this regard, the authors conduct an empirical assessment of the consequences for Russia of foreign initiatives to distribute global profits between jurisdictions in the context of the country’s limited participation in traditional information exchange. The assessment addressed the areas of international exchange of tax information and procedures for resolving international tax disputes. The authors suggest measures to counter the erosion of the national tax base in the context of limited cooperation and collaboration in tax administration. Once we have clarified the current multilateral and bilateral international tax treaties with states that have not imposed sanctions on Russia, we will be able to assess the country's attractiveness to investors from these countries and understand the practical implications of the findings.
Keywords: international taxation, deoffshorization, international tax cooperation, international tax treaty, exchange of information, Pillar 1, Pillar 2
JEL: F23, H25, H26
Funding: The article is based on the results of research carried out at the expense of budgetary funds under the state assignment to the Financial University for 2024.
For citation: Polezharova L.V., Pinskaya M.R., Vinogradova E.Yu. (2024). Improving Russia’s Tax Policy in the Sphere of International Taxation. Financial Journal, 16 (3), 40–50 (In Russ.). https://doi.org/10.31107/2075-1990-2024-3-40-50.
© Polezharova L.V., Pinskaya M.R., Vinogradova E.Yu., 2024

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G.A. Petrosyan, N.N. Karapetyan, A.A. Margaryan, A.N. Sokolov, I.I. Yakovleva, A.I. Votinov
Bayesian Approach to Forecasting Aggregate Taxes of the Republic of Armenia
, p. 51-67
Abstract
This paper is devoted to the application of the Bayesian approach to the forecasting of aggregate taxes on the example of the Republic of Armenia. Typically, this approach is used in large-scale BVARs to forecast macroeconomic variables. The objective of this study is to estimate the efficiency of the Bayesian approach to constricting relatively low-scale fiscal VARs. Another objective is to build a specific BVAR model for forecasting tax revenues in the context of actual forecasting rounds. The study is based on seasonally adjusted quarterly aggregate tax data and the corresponding proxy bases. A hierarchical approach to the selection of BVAR’s priors is implemented. It assumes the random nature of variances in the prior values of the coefficients. The hierarchical approach is also characterized by a high level of variability of hyperparameters. To determine the optimal structure of the BVAR model in terms of out-of-sample prediction accuracy, a special algorithm was developed. This algorithm involves a specific procedure for the selection of priors and model parameters, which allows to significantly minimize the prediction error. The Geweke and Gelman-Rubin tests were used/considered to check the convergence of the parameters, and the acceptance rate of the Metropolis-Hastings algorithm was taken into account. It Additional priors, such as the sum-of-coefficients prior and the dummy-initialobservation prior (single-unit-root), are shown to improve the quality of out-of-sample forecasts. These priors allow for the possibility of the existence of a single root and cointegration between variables. The main finding of this study is that the proposed algorithm for selecting parameters in BVAR significantly improves out-of-sample performance compared to traditional frequency VAR.
Keywords: aggregate tax forecasting, vector autoregressive model (vector autoregression), Bayesian hierarchical approach
JEL: C11, C32, H68
For citation: Petrosyan G.A. et al. (2024). Bayesian Approach to Forecasting Aggregate Taxes of the Republic of Armenia. Financial Journal, 16 (3), 51–67 (In Russ.). https://doi.org/10.31107/2075-1990-2024-3-51-67.
© Petrosyan G.A. et al., 2024

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R.V. Balakin, Yu.A. Steshenko
Review of Approaches to Assessing the Impact of New Challenges on the Economy and Certain Aspects of Taxation
, p. 68-85
Abstract
The article presents a review of publications devoted to the approaches to assessing the impact of external shocks on the economy in general and on certain aspects of taxation in particular. It considers both studies that assess this impact by analyzing macroeconomic indicators (less often — budget indicators) and building econometric models (mainly SVAR and VAR models are used in this case), and studies in which various authors propose their own indicators to assess this impact (most often they are either sustainability indicators or stress indicators). Special attention is paid to publications the subject of which is the impact of new challenges on the tax system. A separate block includes publications in which the above issues are considered in relation to the Russian tax system. These are not only scientific articles on the topic, but also documents of international organizations, such as the International Monetary Fund, OECD, World Bank, etc. In addition, the article provides an overview of publications of foreign scientific institutes and research centers. Sanctions imposed on the economy of the Russian Federation are a particular case of an external shock. Thus, a review of publications assessing the impact of new challenges (by the example of sanctions) on the tax system of the Russian Federation is presented. The authors conclude that to assess the impact of new challenges on the tax system it is more advisable to use indicators based on statistical tax reporting.
Keywords: tax system, external shocks, new challenges, sanctions, tax security
JEL: H12, E62
Funding: The research was funded by the Russian Science Foundation, project No. 23‑78‑10160, https://rscf.ru/project/23-78-10160/.
For citation: Balakin R.V., Steshenko Yu.A. (2024). Review of Approaches to Assessing the Impact of New Challenges on the Economy and Certain Aspects of Taxation. Financial Journal, 16 (3), 68–85 (In Russ.). https://doi.org/10.31107/2075-1990-2024-3-68-85.
© Balakin R.V., Steshenko Yu.A., 2024

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A.F. Kireyeva, K.V. Rudy
Paradoxes of the Anti-crisis Role of Fiscal Federalism: Analytical Review of Studies
, p. 86-97
Abstract
The analytical review of studies of the anti-crisis role of fiscal federalism during economic, ecological, epidemic challenges and territorial conflicts in 1950–2024 reveals four paradoxes. The first of them indicates the scientific validity of the positive anti-crisis effect of fiscal decentralization. But when crises arise in practice, decentralization turns out to be unclaimed, and preference is given to centralization. The second paradox is related to the nonlinear positive effect of fiscal decentralization on economic growth, natural resources consumption, and carbon emissions. For example, the nonlinear positive effect of decentralization is achieved when the institutional context is improved. The third paradox is the relatively weak methodological elaboration of fiscal federalism during pandemic challenges, although it had the greatest practical relevance compared to more in-depth econometric studies of economic and environmental challenges. The fourth paradox is that fiscal federalism can both resolve the territorial conflict and create the preconditions for its resumption in the future. The peacemaking conditions of fiscal federalism are transparency and stability of inter-budget transfers, as well as insured access of the conflict region to its natural resources.
Keywords: fiscal federalism, public finance, economic crises, sustainable development, pandemic, conflicts
JEL: H12, H71, H77, R11, R58
Funding: The article was prepared as the result of the research financed by budgetary funds upon the state request from Financial University.
For citation: Kireyeva A.F., Rudy K.V. (2024). Paradoxes of the Anti-crisis Role of Fiscal Federalism: Analytical Review of Studies. Financial Journal, 16 (3), 86–97. https://doi.org/10.31107/2075-1990-2024-3-86-97.
© Kireyeva A.F., Rudy K.V., 2024

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S.I. Chuzhmarova, A.I. Chuzhmarov
Tax Incentives for Transition to Rational Consumption and Production Patterns
, p. 98-113
Abstract
The presented work touches upon the problem of economic transition to more environmentally friendly types of production and more careful use of resources, which is topical for the world community. The problem of transition from environmentally costly production models to more sustainable ones is reflected in the UN’s Sustainable Development Goal 12, titled “responsible consumption and production”. Achievement of this global goal is impossible without state financial support and investment incentives. One of the main financial instruments of stimulation are taxes, which at the national level allow to directly and indirectly influence producers of environmentally friendly products and their transition to new green technologies, as well as consumers. The problem of increasing the impact of taxes pushes for the transformation of taxation and the formation of new incentives. The arsenal of developed and developing countries has a wide range of fiscal instruments and accumulated experience of tax impact on production and consumption, the study of which can be useful in the formation of tax policy. The purpose of this paper is to analyze the experience of individual countries and systematize the tools of tax incentives for the transition to more environmentally friendly types of production and rational consumption of resources and justification of promising directions of tax impact. Based on the study of international experience, the authors determine the approaches of countries to the construction of tax incentives for the rational development and use of natural resources, reduction of environmental pollution. They also substantiate the need for tax support for building up scientific and technological potential, sustainable tourism and sustainable public procurement. The next promising direction of research may be the formation of tax instruments to eliminate market imbalances reflected in wasteful consumption of resources, transformation of indirect taxation of consumption, tax support for social projects, tax regulation of energy efficiency.
Keywords: tax, sustainable development, production, consumption, incentives, SDG 12
JEL: H22, H61
Funding: The publication was prepared in accordance with the Research Plan of the Pitirim Sorokin Syktyvkar State University and the Research Plan of the Institute of Economics of the Urals Branch of the Russian Academy of Sciences.
For citation: Chuzhmarova S.I., Chuzhmarov A.I. (2024). Tax Incentives for Transition to Rational Consumption and Production Patterns. Financial Journal, 16 (3), 98–113 (In Russ.). https://doi.org/10.31107/2075-1990-2024-3-98-113.
© Chuzhmarova S.I., Chuzhmarov A.I., 2024

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B.I. Alekhin
Russians’ Personal Savings in the Regional Context, p. 114-132
Abstract
The purpose of this study is to find empirical evidence of long-run equilibrium relationship between the personal savings ratio and several factors that, in the author’s opinion, determine this ratio. To achieve this purpose, a panel for 82 regions of the Russian Federation for the years 2000–2022 was assembled on the basis of official statistics data. In the descriptive part of the paper, we examined theories of personal savings, saving behavior of the population, the impact of personal savings on economic growth and the reasons why regional authorities should improve the climate for personal savings and growth of the working-age population in their regions. We used the PMG method to estimate our empirical ARDL model and found that the personal savings ratio is mainly determined by the age composition of the regional population and regional inflation, while money income and household final consumption are robust control variables. There is a long-run equilibrium relationship between these variables.
Keywords: personal savings, economic growth, cointegration, regions, Russia
JEL: D14, E21, C23
For citation: Alekhin B.I. (2024). Russians’ Personal Savings in the Regional Context. Financial Journal, 16 (3), 114–132 (In Russ.).
https://doi.org/10.31107/2075-1990-2024-3-114-132.
© Alekhin B.I., 2024

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Financial Journal Vol.16 No.2 2024

CONTENTS

L.S. Kabir
Tuning Climate Finance: Outcomes of СOР28
, p. 8-26
Abstract
The purpose of the study is to systematize the main directions of the discussion that unfolded at the COP28 UN Climate Change Conference in Dubai in November-December 2023 on the need to reform the financial mechanism of the UN climate convention. The relevance of this study is based on the fact that today the conditions have been formed to intensify Russia’s participation in the discussion at the international level on the goals and objectives of climate and sustainable finance, as there is growing dissatisfaction with the aggressive policy of developed countries trying to solve their development problems, including by distorting and replacing the global agenda previously agreed by the majority of the world's countries on the UN platform. The main conclusion of the study is as follows. When considering the problems of organization of both the climate finance mechanism and the sustainable finance mechanism in the context of the organization and functioning of the Technology Mechanism (UNFCCC) and the Technology Facilitation Mechanism (UN 2030 Agenda), embedded in the current discussion on the need to reform the financial mechanism of the UN climate convention, many issues related to the incorrectness, inconsistency and divergence of these concepts at the level of different countries can be effectively addressed by the UNFCCC. Returning the consideration of both climate and sustainable finance to the context of technological modernization tasks solved by society (as originally defined in the UN documents) will make it possible to return the process of transition of countries to a new sustainable development model to the original direction; to get rid of manipulations and substitution of concepts used by a group of developed countries; to reach consensus among all Parties to the Convention.
Keywords: climate finance, sustainable finance, climate change, climate change adaptation, sources of finance, finance flows, financing instruments, sustainable development
JEL: F53, F55, F65, F68, O44, Q48, Q54, Q58
For citation: Kabir L.S. (2024). Tuning Climate Finance: Outcomes of СOР28. Financial Journal, 16 (2), 8–26 (In Russ.). https://doi.org/10.31107/2075-1990-2024-2-8-26
© Kabir L.S., 2024

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M.Yu. Malkina, D.Yu. Rogachev
Financial Contagion of the Russian Stock Market from the European Stock Market During the COVID-19 Pandemic
, p. 27-42
Abstract
This paper investigates the transmission of financial contagion from the European to the Russian stock market during the COVID-19 pandemic. Financial contagion refers to the spread of instability and shocks across individual countries, sectors, or markets during a crisis, where the relationship between returns and volatility of different assets goes beyond normal interactions. Using the construction of extended autoregressive models, we test the contagion of the RTSI composite index from the EURO STOXX 50 index, with the US dollar exchange rate and the spot price of Urals crude oil serving as control variables. The calculation of the moving coefficient of variation in assets prices allows us to distinguish the pre-crisis, crisis and post-crisis periods, for which three separate autoregressive models are built. The contagion of the Russian stock market from the European stock market in these models is identified in two ways: 1) based on the growth and significance of estimated coefficient for the tested variable (STOXX 50 index return) during the crisis; 2) through an increase in the contribution of the tested variable to the explained variance of the dependent variable (RTSI return). In addition, we tested contagion based on the method of central co-moments of the distribution of returns, skewness and volatility of the tested and dependent variable. The analysis has convincingly demonstrated the existence of a financial contagion effect from the European stock market to the Russian stock market in the short term — strengthening of the impact of the European STOXX 50 index on the Russian RTSI index in the acute phase of the pandemic. Understanding the factors contributing to the spread of market shocks in the context of financial globalization can help policymakers to implement effective financial regulatory measures and maintain long-term financial stability in line with national interests. For investors, it helps to identify potential risks and opportunities, enabling optimal hedging and diversification response strategies.
Keywords: stock market, rate of returns, financial contagion, COVID-19 pandemic, exchange rate, crude oil price, extended autoregressive model
JEL: G01, F37
Funding: The research was supported by the Russian Science Foundation grant No. 23-28-00453, https://rscf.ru/project/23-28-00453/.
For citation: Malkina M.Yu., Rogachev D.Yu. (2024). Financial Contagion of the Russian Stock Market from the European Stock Market During the COVID-19 Pandemic. Financial Journal, 16 (2), 27–42 (In Russ.). https://doi.org/10.31107/2075-1990-2024-2-27-42
© Malkina M.Yu., Rogachev D.Yu., 2024

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A.V. Navoy
Prospects for Transformation of the System of International Settlements in the Russian Federation
Based on Central Banks Digital Currencies
, p. 43-58
Abstract
Fragmentation of the global financial and economic space and difficulties in the organization of international settlements cause the restructuring of the international settlement system of the Russian Federation. Russia’s need for a reliable system of international settlements is due to its rapid involvement in the system of international trade, the need for high-tech imports, sales of raw materials and high-grade goods. One of the most promising options for a new design of payment infrastructure protected from sanctions pressure is the creation of an international payment system based on the peer-to-peer model using central bank digital currencies (CBDC). The Committee on Payment Infrastructures is actively theorizing this model. To date, the Russian Federation (digital ruble) and the People's Republic of China (digital yuan) demonstrate a high level of readiness to make settlements in the CBDC. The creation of a payment system based on CBDC fundamentally changes the entire landscape of international settlements, not only reducing the cost of transactions, but also ensuring their reliability, transparency and protection from the negative influence of other countries. Of particular interest is the model of clearing using CBDC in BRICS countries, which will allow for centralized netting of mutual positions of the countries in national currencies and gradual displacement of currencies of developed countries from mutual settlements.
Keywords: international trade, international financial organizations, international settlements, BRICS, clearing, central bank digital currencies, digital assets
JEL: G21, F24, F37, E58
Funding: The article is based on the results of research carried out at the expense of budgetary funds under the state assignment of the Financial University under the Government of the Russian Federation.
For citation: Navoy A.V. (2024). Prospects for Transformation of the System of International Settlements in the Russian Federation Based on Central Banks Digital Currencies. Financial Journal, 16 (2), 43–58 (In Russ.). https://doi.org/10.31107/2075-1990-2024-2-43-58
© Navoy A.V., 2024

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M.E. Kevorkova
Prospective Approaches to Assessing the Efficiency of the State Financial Control Bodies’ Activities
, p. 59-71
Abstract
The article discusses the existing scientific approaches to evaluating the efficiency of the activities of state financial control bodies. The content of the efficiency concept is disclosed, scientific views on the formation of the system of performance measurement indicators are examined. The lack of uniformity of approaches to the development of criteria and indicators for assessing the efficiency of the state financial control bodies’ activities is also revealed. The purpose of the study is to formulate unified, universal approaches to such an assessment. The author proposes original ways of evaluation using complex indicators. In the course of the study the methods of systematization, comparative, logical and statistical analysis were used. The results can be used by the bodies of state financial control for the development of efficiency assessment methodology.
Keywords: state financial control, efficiency, efficiency assessment, criteria, indicators
JEL: E63, H83
For citation: Kevorkova M.E. (2024). Prospective Approaches to Assessing the Efficiency of the State Financial Control Bodies’ Activities. Financial Journal, 16 (2), 59–71 (In Russ.). https://doi.org/10.31107/2075-1990-2024-2-59-71
© Kevorkova M.E., 2024

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N.A. Khutorova
ESG Approaches in Securitization Transactions
, p. 72-87
Abstract
The spread of the sustainable development concept has given rise to sustainable finance, as well as the infrastructure of the financial and consulting industry of valuations, verifications and various databases in the field of ESG. This research is devoted to theoretical and practical study of the accumulated experience of ESG securitization transactions in order to systematize ESG financing instruments and directions of development of this sphere in modern conditions. The study showes that ESG securitization practices are being integrated into capital management processes in line with sustainable development goals, with the most developed centers in the USA, Europe and China. The study systematizes the main types of ESG securitized assets, gives their characteristics and identifies current trends. In Russia, despite its isolation from the world financial markets, the practice of ESG securitization is developing, covering new directions. The study notes the potential for the development of green mortgages, which will contribute to the activation of securitization transactions in the segment of residential and commercial real estate. High potential for development of the social segment of ESG securitization is also noted due to the growing demand for financing social projects in the regions. Expansion of the practice of social mortgage securitization will contribute to the redistribution of risks between the public and private sectors, while active involvement of Russian banks in a variety of ESG lending programs (car loans, lending to small and medium-sized businesses with a green and social focus, e.g. for the construction of social infrastructure, etc.) will expand the market. There is a suggestion that the development of digital ESG securitization platforms will help expand the reach of retail investors, while cooling the junk bond market. The article notes that the expansion of multi-tranche ESG securitization will allow long-term assets of pension funds and various ESG funds to be leveraged into mortgage-backed securities. Overall, ESG securitization improves the structure of transactions, expands the range of derivatives used, improves the quality of credit and interest rate risk management, and contributes to the achievement of sustainable development goals.
Keywords: sustainable development, ESG securitization, mortgage-backed securities
JEL: G32, P11, G15, Q57
For citation: Khutorova N.A. (2024). ESG Approaches in Securitization Transactions. Financial Journal, 16 (2), 72–87 (In Russ.).
https://doi.org/10.31107/2075-1990-2024-2-72-87
© Khutorova N.A., 2024

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A.O. Volodina, M.B. Trachenko
Financial Indicators of Value Dynamics of ESG-oriented Companies in China
, p. 88-103
Abstract
The priority of investing in sustainable development and ESG-oriented companies has become a global trend. Along with the developed markets of the USA and Europe, numerous ESG indices have been formed in countries of other continents. This segment of the stock market shows high growth rates in China. The purpose of the article is to identify the financial indicators that are most closely related to the value dynamics of ESG-oriented companies in China. The empirical base for the comparative analysis of companies adhering to ESG principles and not implementing them in practice was 48 companies included in the SSE 180 ESG Leaders Index of the Shanghai Stock Exchange, and 44 companies from the Shanghai Composite index that are not included in the ESG indices. The analysis of the value dynamics of the two groups of companies showed the higher resilience of ESG-oriented enterprises to the crisis phenomena in the economy. However, the comparative analysis of multipliers did not allow us to conclude that one of the groups of companies is more attractive for investment. Special attention was paid to the study of financial indicators of fundamental analysis. The main conclusion is important for investors: the growth in the value of ESG-neutral companies is not consistent with the positive dynamics of financial indicators, and such investments are riskier than investments in ESG-oriented companies. Further research on investment attractiveness of financial ESG-instruments and individual companies, adhering to the principles of sustainable development and represented in the stock market of China, will be associated with more detailed factor analysis, which is important for Russian investors to make informed decisions when developing a new capital market.
Keywords: ESG, profitability, capital structure, company value, sustainable development, cash flow
JEL: G32
For citation: Volodina A.O., Trachenko M.B. (2024). Financial Indicators of Value Dynamics of ESGoriented Companies in China. Financial Journal, 16 (2), 88–103 (In Russ.). https://doi.org/10.31107/2075-1990-2024-2-88-103
© Volodina A.O., Trachenko M.B., 2024

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M.V. Milchakov
Fiscal and Financial Situation of the Constituent Entities of the Russian Federation:
Medium-term Trends in the Regional Context
, p. 104-125
Abstract
The article is devoted to the changes in the fiscal and financial situation of Russian regions in 2020–2022. During this period, the regions faced a new challenge in the form of a pandemic. The author gives a quantitative assessment of the changes that have occurred, analyzes the features of support measures and the regional policy being implemented. The article examines changes in the parameters of regional budget revenues, budget deficits and debt burden. In addition, the author identifies a group of regions with maximum changes in per capita budget revenues and the factors that caused these changes. The author pays special attention to measures in the field of debt policy, methodology for equalization grant allocation, as well as demographic characteristics affecting regional expenditures. The article presents proposals for possible further improvement of the system of interbudgetary fiscal relations, including approaches to the provision of unconditional gap-filling financial support.
Keywords: intergovernmental fiscal relations, public debt, intergovernmental transfers, regional budgets, budget fiscal capacity index, pandemic
JEL: H61, H63, H72, H77, R11, R58
For citation: Milchakov M.V. (2024). Fiscal and Financial Situation of the Constituent Entities of the Russian Federation: Medium-term Trends in the Regional Context. Financial Journal, 16 (2), 104–125 (In Russ.). https://doi.org/10.31107/2075-1990-2024-2-104-125
© Milchakov M.V., 2024

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Yu.V. Belousov
Bitcoin and Forms of Money: Theoretical Issues
, p. 126-141
Abstract
The paper considers the question that has gained relevance in the last decade: whether the cryptocurrency bitcoin is money. The economic literature provides different opinions on this issue. The analysis shows that disagreements arise because of the different understanding of the category of ‘money’ rather than because of the nature of bitcoin. The author analyzes popular interpretations of money in terms of their applicability to the definition of the role and place of cryptocurrencies in the financial system. The purpose of this study is to define money as a financial instrument that linksthe creation of gross social product with its distribution. The author believes that money emerged and exists as a tool that ensures a connection between the contribution of each economic entity to the total product of society and the right to receive an equivalent amount of goods from this gross product. At the same time, the author defines money as an ‘ideal right’ to receive a share of the gross social product. In this regard, the analysis of bitcoin shows that this cryptocurrency allows obtaining goods from the gross social product in many countries, while bitcoin owners do not contribute to the gross social product. Based on this, bitcoin cannot be considered money; it is a money substitute, or surrogate money. At the same time, bitcoin was created as money and performs the functions of money, but to a limited extent. Bitcoin can only perform the functions of money as a supplement to an existing official currency. It is not capable of functioning as the only currency in a society. The interpretation proposed in this paper can be used for the purposes of developing the Russian law on cryptocurrencies is currently being worked on by the Government and the Central Bank of Russia.
Keywords: money, theories of money, paper money, electronic money, cryptocurrency, bitcoin
JEL: E42, E49
For citation: Belousov Yu.V. (2024). Bitcoin and Forms of Money: Theoretical Issues. Financial Journal, 16 (2), 126–141 (In Russ.).
https://doi.org/10.31107/2075-1990-2024-2-126-141
© Belousov Yu.V., 2024

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Financial Journal Vol.16 No.1 2024

CONTENTS

E.V. Martyanova, A.V. Polbin
Scenario Assessment of Macroeconomic Effects of Progressive Taxation in Russia
, p. 8-30
Abstract
The purpose of the study is to assess the impact of alternative options of progressive taxation on Russia’s macroeconomic performance. For quantitative assessments, a neoclassical general equilibrium model with heterogeneous households subject to idiosyncratic income shocks was used. Three groups of scenarios were analyzed, setting a threshold progressive tax scale with thresholds of 30, 50, and 70 thousand rubles, under which state income tax revenues (1) grow, (2) remain unchanged, and (3) decline. The maximum personal income tax rate in the analyzed scenarios was 25%. Steady states and transitions were calculated for the scenarios. According to the quantitative estimates, the first reform leads to a loss of 0.3% to 1.3% of GDP in the long run, depending on the assumed rates and threshold. Despite the increase in lump-sum transfers, aggregate household consumption decreases by 0.5–1.7% in all cases. The second reform leads to a loss of 0.2% to 0.6% of GDP in the long run. The third reform leads to insignificant fluctuations of GDP within 0.1%: GDP increases at the threshold of 30 thousand rubles and decreases at other thresholds. The scale of inequality reduction, as measured by the Gini coefficient, increases with an increase in the top tax rate. However, as the threshold increases, the depth of the Gini index reduction first increases and then decreases. In the short run, there is upward pressure on wages and prices. This is because a decrease in labor supply with unchanged capital in the short run leads to an increase in wage rates (a shift along the labor demand curve), and an increase in wage rates means an increase in marginal costs for firms, leading to higher prices.
Keywords: general equilibrium, heterogeneous agents, fiscal policy, progressive taxation
JEL: E13, E21, E62, H24, H31
For citation: Martyanova E.V., Polbin A.V. (2024). Scenario Assessment of Macroeconomic Effects of Progressive Taxation in Russia. Financial Journal, 16 (1), 8–30 (In Russ.). https://doi.org/10.31107/2075-1990-2024-1-8-30.
© Martyanova E.V., Polbin A.V., 2024

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S.V. Arzhenovskiy
Forecasting GDP Dynamics Based on the Bank of Russia’s Enterprise Monitoring Data
, p. 31-44
Abstract
The article is devoted to modeling and forecasting of the gross domestic product of Russia based on the data of enterprise survey conducted by the Bank of Russia. The purpose was to study the possibility of improving the efficiency and accuracy of GDP forecasting based on the use of these data. The authors used business climate indicators as well as balances of responses to questions about dynamics of output, demand, and prices. The methodology included regression analysis, as well as a combination of factor and regression analysis, both on aggregate data on all economic sectors and on data on individual economic branches. The forecasting results for two control samples containing actual observations for the eight quarters of 2017–2018 and the five quarters of 2022–2023 suggested that the use of monitoring data improved forecasting accuracy compared to the ARIMA benchmark model. The lowest estimation errors were obtained for approaches combining factor and regression analysis on aggregate data for all economic sectors or the economy as a whole.
Keywords: enterprise monitoring, business climate indicator, factor analysis, regression analysis
JEL: C22, C53, C81, E27
Note: the views expressed herein are solely those of the author. The content and results of this research should not be considered or referred to in any publications as the Bank of Russia’s official position, official policy, or decisions. Any errors in this document are the responsibility of the author.
For citation: Arzhenovskiy S.V. (2024). Forecasting GDP Dynamics Based on the Bank of Russia’s Enterprise Monitoring Data. Financial Journal, 16 (1), 31–44 (In Russ.). https://doi.org/10.31107/2075-1990-2024-1-31-44.
© Arzhenovskiy S.V., 2024

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E.E. Grishina
Financial Situation of Large Families and Factors of Their Income Growth
, p. 45-60
Abstract
The article analyzes changes in the financial situation of large families in the period from 2018 to 2022 using the data of the Rosstat’s Comprehensive Observation of Living Conditions of the Population for 2018 and 2022. The prevalence of various deprivations among large households and households with children in general is estimated. Changes in household income relative to the poverty line and deprivation level between 2018 and 2022 are calculated. It is shown that despite the improvement in financial status between 2018 and 2022, large families continue to experience significant risks of poverty and deprivation. To assess the factors affecting the incomes of large households, Rosstat data of the Sample Survey of Population Income and Participation in Social Programs (VNDN-2022) were used. Regression analysis shows that employment of adult members of a large family, improvement of their education and qualification level will contribute to the growth of average per capita family income relative to the poverty line. The article outlines proposals for increasing the labor potential of large families, improving their financial situation and reducing poverty.
Keywords: large families, households with three or more children, financial situation, income, support measures
JEL: I31, I38, H75
Funding: the research was funded by a grant from the Russian Science Foundation No. 23-18-00537, https://rscf.ru/en/project/23-18-00537/, at the Institute of Economics of the Russian Academy of Sciences.
For citation: Grishina E.E. (2024). Financial Situation of Large Families and Factors of Their Income Growth. Financial Journal, 16 (1), 45–60 (In Russ.). https://doi.org/10.31107/2075-1990-2024-1-45-60.
© Grishina E.E., 2024

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S.S. Sudakov, A.A. Zinchenko
Export Potential Assessment Methodology: The Case of the Republic of Uzbekistan
, p. 61-77
Abstract
This paper proposes a universal methodology for assessing export potential of different countries. It takes into account both external and internal supply and demand factors. The methodology is based on the assessment of various trade indices, such as the Balassa index, trade complementarity index and export specialization index. In addition to analyzing the export capabilities of countries, the methodology also focuses on analyzing the countries’ presence in foreign markets (through the geographical structure of imports). The presented methodology is complemented by the estimation of output multipliers (based on Input — Output tables). The calculation of output multipliers takes into account additional induced effects resulting from the growth of household and government incomes, which are partly spent on additional consumption. Complementary analysis of trade indices and output multipliers (including induced effects) allows to identify sectors and products that will most stimulate economic growth by increasing exports. The proposed methodology has been tested on data for the Republic of Uzbekistan in terms of intensive margin of trade. The results of the analysis show that the methodology can be used as a basis for preparing export development programs for individual countries. The methodology could be improved by a deeper analysis of foreign trade barriers, domestic supply factors and extensive trade margins. However, up-to-date information on these improvement factors is not always publicly available.
Keywords: trade indices, input-output multipliers, Input-Output tables, export potential
JEL: C67, D57, F13, F63
For citation: Sudakov S.S., Zinchenko A.A. (2024). Export Potential Assessment Methodology: The Case of the Republic of Uzbekistan. Financial Journal, 16 (1), 61–77 (In Russ.). https://doi.org/10.31107/2075-1990-2024-1-61-77.
© Sudakov S.S., Zinchenko A.A., 2024

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M.V. Sigova, I.K. Klyuchnikov, O.I. Klyuchnikov
Sustainability and Security of Green Finance from the Multi-agent Games Perspective
, p. 78-95
Abstract
Green finance increases the innovation potential of green transformation, helps to address climate change, the environmental crisis and energy security. It is important for green finance to achieve sustainable and balanced development, which will increase the security of both finance itself and many processes in the real economy that depend on it. The purpose of this study was to develop approaches to the ontological design of green finance and multi-agent modeling of the behavior of green finance actors, considering their sustainable and safe interaction. To achieve this goal it was necessary to clarify the conceptual apparatus of green finance and related areas; to characterize the "work" of the multi-agent model in the analysis of the behavior of the main green finance actors and to trace the prospects for their impact on the stability and security of the financial market; and finally, based on ontology construction and agent-based approach to nonlinear interactions in the green financial process, to determine the mechanism of building chains of the main market participants. The methodological basis of the study consists of general scientific research methods (analysis, synthesis, induction, deduction, logic), as well as evolutionary dynamics and agent-based approach to the analysis of financial markets. A comparative analysis of the works of various authors and the interpretation of theoretical provisions in related areas of knowledge about finance, as well as the analysis of their sustainable and safe development were carried out. As a result of the study, the authors identified the main approaches to the design of financial ontology and multi-agent modeling of financial interactions in the direction of determining their sustainable and safe development. The proposed model establishes that the criterion of the effectiveness of the applied strategy is the satisfaction with the state of financial impact on the economy, environment, and social sphere. Maintaining this state, along with saving the amount of resources used, is done through optimization. The chosen approach corresponds to the concept of sustainable development and safe functioning of the systems under consideration.
Keywords: green finance, ontology, multi-agent modeling, sustainability, security
JEL: F01, B41, F30, F37, Q50, Q56
For citation: Sigova M.V., Klyuchnikov I.K., Klyuchnikov O.I. (2024). Sustainability and Security of Green Finance from the Multi-agent Games Perspective. Financial Journal, 16 (1), 78–95 (In Russ.). https://doi.org/10.31107/2075-1990-2024-1-78-95.
© Sigova M.V., Klyuchnikov I.K., Klyuchnikov O.I., 2024

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O.V. Khmyz
Sustainable Investments and Divestments by Global Institutional Investors
, p. 96-108
Abstract
The article analyzes the investment activity of sustainable institutional investors after the global financial and economic crisis of 2008. The relevance of the study is conditioned, firstly, by the leading positions of institutional investors in the global financial market and in the system of international finance; secondly, by the special role of mutual funds and ETFs in the global market of sustainable finance; thirdly, by the noticeable dynamics of investments by these market participants in recent years, which increasingly turns into divestments. The purpose of the study is to identify current trends in sustainable investment by global institutional investors and formulate their further actions in the short term. To do this, it is necessary to solve the following tasks: to clarify, taking into account the latest statistical data, the impact of the COVID-19 pandemic and other force majeure factors on the size and dynamics of the flow of funds of sustainable institutional investors in the leading countries of the world, and to assess the impact on investment prospects of current political and financial factors. In the course of the study, a significant amount of scientific research was analyzed, which served as a basis for identifying the institutional investors’ approaches to sustainable finance. It is concluded that the prospects for global sustainable investing are favorable due to the continued stimulation of environmental change at the supranational level, both in developed and leading developing countries. The financial success of sustainable investment will also contribute to this.
Keywords: institutional investors, sustainable finance, ESG, green bonds, sustainable bonds, investment funds
JEL: G23, G20, F21, N20
For citation: Khmyz O.V. (2024). Sustainable Investments and Divestments by Global Institutional Investors. Financial Journal, 16 (1), 96–108 (In Russ.). https://doi.org/10.31107/2075-1990-2024-1-96-108.
© Khmyz O.V., 2024

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I.P. Dovbiy, N.S. Dovbiy
Sustainable Finance in Addressing the Challenges of Energy Transition and Climate Change Mitigation
, p. 109-124
Abstract
This study reveals the special role of finance related to the climate and energy transition, the effectiveness of which is evaluated by ESG criteria. The authors define the concept of "sustainable finance" as economic relations within the framework of purposeful formation of capital flows in accordance with ESG principles from public, corporate and private sources and their channeling to achieve the goals of sustainable development, energy transition and adaptation to climate change. It is established that the sustainable development policy implies a comprehensive achievement of goals and solving problems related to the energy transition and overcoming the consequences of climate change, without considering one without the other. The article reveals a connection between the strengthening of climate-related risk management and acceleration of energy consumption, which led to an increase in investor demand for reliable, comprehensive and comparable information. It also reveals significant contradictions between the global players of the global economy regarding the timing and forms of ensuring technological sovereignty and the special role of sustainable finance in achieving it, as well as the importance for Russia to follow global trends in the climate and energy transition. As a special segment of sustainable finance, the field of venture climate finance is developing quite rapidly, but this process is hampered by the lack of adequate information among venture investors about ESG in hightech startup companies and the specter of "black swans" in the financial markets.
Keywords: energy transition, sustainable finance, climate agenda, decarbonization, technological sovereignty, ESG, venture financing
JEL: Q01, Q42, Q56
For citation: Dovbiy I.P., Dovbiy N.S. (2024). Sustainable Finance in Addressing the Challenges of Energy Transition and Climate Change Mitigation. Financial Journal, 16 (1), 109–124 (In Russ.). https://doi.org/10.31107/2075-1990-2024-1-109-124.
© Dovbiy I.P., Dovbiy N.S., 2024

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L.N. Ivanova, O.V. Umgaeva
Digital Marking of Jewelry: Leveling the Risks of Implementation
, p. 125-135
Abstract
The possibility of leveling the risks of introducing digital labeling of jewelry is of significant interest at the current stage of functioning of the state integrated information system in the field of turnover of precious metals, gemstones and articles made of them (GIIS DMDK). In accordance with the current legislation, digital transformation is actually already registered at all enterprises in this field, starting from mining and refining and ending with the sale of jewelry. The accumulated experience and the scheme of implementing digital accounting should be considered when improving the system of turnover of precious stones and metals within the EAEU countries that have signed a cooperation agreement, therefore it is logical to analyze the problems in this area. From the authors’ point of view, the planned tasks of the next stages of implementation of the GIIS DMDK system require clarification, in particular, labeling and building new business models on its basis. The article offers an analysis and justification of various options for solving these problems of expediency of practical application, reducing the risks of rejection of labeling by participants in the precious metals and gemstones turnover and achieving the expected effect.
Keywords: digital marking, GIIS DMDK, digital code, jewelry, branding, testing, turnover of precious stones and metals
JEL: D51, G28, G32, O29, L15
Funding: the article was prepared as part of the research work under the state assignment of the Financial Research Institute.
For citation: Ivanova L.N., Umgaeva O.V. (2024). Digital Marking of Jewelry: Leveling the Risks of Implementation. Financial Journal, 16 (1), 125–135 (In Russ.). https://doi.org/10.31107/2075-1990-2024-1-125-135.
© Ivanova L.N., Umgaeva O.V., 2024

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Scientific periodical

ISSN 2658-5332