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TERRA ECONOMICUS

AN «ELEMENTARY PARTICLE» OF THE ECONOMY

TERRA ECONOMICUS, , Vol. 16 (no. 3),

The article deals with the necessity of focusing the attention of theoretical economists on the problem of determining the «elementary particle» of the economy. The author asserts that in natural science the elementary particles of complex structured research objects form a special class of objectively existing (albeit not always fixed) reality. The main distinguishing feature of elementary particles seen as the research objects is impossibility of decomposing them into constituent parts. This feature is an intrinsic epistemic for the natural science research. In other words, having an elementary particle broken up, the researcher shifts to a different – «non-economic» – level of being of social phenomena. This different – non-economic – cognitive level requires a different interpretation and methodologies. This impossibility (if we follow traditional, or classic, interpretation of the subject of economics) of further decomposition allows the researcher identification of the elementary (epistemologically-indivisible) particles of economic relations, and hence economic knowledge. The problem statement is formulated in the article, showing the epistemological importance of detecting the «elementary particle» for the social science. The author’s approach to an elementary particle of the economy is emphasized, the consequences of this approach for economics’ development are outlined.

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PRIME MERIDIAN: CONSEQUENCES FOR MODELING FINANCIAL NONSYNCHRONOUS TIME SERIES

TERRA ECONOMICUS, , Vol. 16 (no. 3),

The prime meridian in Greenwich was chosen as an international prime at the International Meridian Conference in 1884. Since then, all the measurements concerning the economic and financial time series have been performed with orientation to that of Greenwich. Taking into account protocols of the conference proceedings, this paper shows that the subjective selection of the prime meridian location, like any choice of a person or a group of people, its seeming axiomatic and a priori character have made the prime meridian an absolute givenness for econometric models, an undisputable initial condition of time series econometrics. Using the mechanics of exogenous variables lags in the classical Granger test, it is possible to demonstrate that some shifts in the prime meridian location cause shifts in the observation borders of the non-synchronous time series data sets. This fact compels values of certain time series to transfer into the neighboring observations, which leads to forming different data sets where classical econometric models and tests will produce other solutions, different from those of Greenwich’s. The use of non-synchronous data, the models with the exogenous variables lags built on autoregression principles, may lead to multiple solutions dependent on the prime meridian location and the number of participating non-synchronous time series with the unique moments of record within a day, relative to prime meridian time. This proves the necessity to correctly consider the bias associated with the choice of a single prime meridian, at least in econometric calculations of non-synchronous time series. The present paper shows the necessity of comprehensive evaluation of the prime meridian bias, not necessarily the Greenwich one, influencing the econometrics of synchronous and non-synchronous time series; such evaluation may help develop the truly objective models irrespective of the prime meridian location or the starting point of time quanta.

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TRENDS IN THE DEVELOPMENT OF SOCIAL INNOVATION

TERRA ECONOMICUS, , Vol. 16 (no. 3),

The article deals with the institutional conditions for the social innovation development. From the theoretical perspective, the relevant key points are very poorly developed. Thus, the aim of this study is to identify trends in the sustainable development of social innovation initiated by citizens. In this context, the author’s interpretation of social innovation is given, and a list of exogenous and endogenous factors affecting the socio-innovative development is introduced. Exogenous factors were grouped as involving the following ones: public administration, socioeconomic conditions, development of human capital, innovation infrastructure, informal institutional environment. Endogenous factors were divided into 2 groups, characterizing the processes of social innovation and resource support. For the present research, a questionnaire has been developed, including closed-ended questions on the features of the development of social and innovative projects. As the research findings, endogenous and exogenous linear models with two or three independent variables are suggested by the authors, showing how the features of national and regional economies affect the results of social and innovation activities. The results indicate that such factors as the number of personnel engaged in R&D, social payments, and taxable income have a positive impact on the budget of small and medium social innovation. Furthermore, the link between the large social innovation budget, on the one hand, and the number of personnel engaged in R&D, and investment potential of the region has been revealed. The research findings show a trend of development of social innovation initiated by citizens. The major practical contribution of the research is that it provides the possibility of the research findings to be used by the state authorities to implement effective policies that will facilitate social innovation development.

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MODELING OF S&T PERSONNEL AGE STRUCTURE

TERRA ECONOMICUS, , Vol. 16 (no. 3),

The article is focused on the problem of the existing imbalance in the age structure of S&T personnel in Russia, expressed in the strong dominance of the group of young researchers. Highlighting examples demonstrated the influence of the government on the occurrence of such an imbalance. The literature review contains analysis of approaches to measure the most productive scientists’ age in different fields of knowledge and to construct research labs’ age structure models. The optimal S&T personnel age structure in Russia is estimated using the model «predator–victim». It is shown that the role of three age groups: young, mature and elderly researchers – in different countries (Russia, France and the UK) is different. To build the model, the hypothesis is formulated that only two age groups are active, and the third plays the role of balancing the staffing segment. Experimental calculations have confirmed this hypothesis. Two scenarios of its formation – demographic (natural inflow and outflow of personnel) and competitive (model reproduction of researchers’ interaction) are considered to identify the degree of intensity of the S&T personnel age structure, which set the interval of acceptable values for the actual shares of age groups. It is shown that the problem of shortage of mature researchers is not a typical Russian problem, but to a large extent is typical for developed European countries; the specificity of the Russian model of scientific personnel reproduction, in which all the problems are aggravated, is considered. The issues of choosing an adequate policy to reduce the negative trend in the formation of the age structure of Russian researchers are discussed.

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MARKET POTENTIAL OF MODERN CORPORATIONS

TERRA ECONOMICUS, , Vol. 16 (no. 3),

A large corporation with a system of specific objective attributes is the most enigmatic subject of the modern market economy: being a fictitious legal entity, it performs its economic activities; being an extreme form of a free self-realization of the market organization of the economy, it becomes an anti-market entity with the process of the monopolization of the production; being coerced to collaborate with all other market participants, it is feuding with almost every one of them. The author considers this market-anti-market status of a large corporation as the source of its immanent self-movement. In this situation, the main subject of the progressive development of the market system becomes the corporate sector, the market position of which have an influence on the future of the market civilization. The article deals with a theoretical analysis of the contribution which can be made by the domestic corporate sector to the systemic progression of the Russian market. After defining the problem, the author proceeds with the following aspects: the dual position of the corporation between the government and the market; an off-market source of the economic power of the corporation; the degree of a real threat to the Russian market of monopolistic «imperialism» from the part of Russian corporations. The author puts a question, what is more effective for the society from the historical perspective – the nationalization of the national economy or its corporatization? The conclusion is, that when entering a stable trajectory of market development, Russian corporations, which concentrate their huge industrial and financial capital in their sector, cannot stand aside. On the contrary, it is necessary that they promote the widespread introduction of market principles, rather than the revival of the principles of the former administrative management system. Therefore, in the opinion of the author, a special economic policy should be formed, the tools and methodology of which would maximize market and minimize the anti-market encroachments of each group of Russian corporations.

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CHINA’S BUDGET SYSTEM AT THE PRESENT STAGE: KEY CHALLENGES AND DEVELOPMENT DIRECTIONS

TERRA ECONOMICUS, , Vol. 16 (no. 3),

At first glance, the budget system of the PRC looks like a paradoxical combination of elements that are likely to be in conflict with each other. However, the fact that for many years Chinese authorities have been able to effectively use fiscal policy to stimulate economic growth, maintain macroeconomic stability and smooth interregional differences, requires a close and unbiased look at the current state and directions of development of budgetary relations in the country. The ratio of revenues and expenditures of central and local budgets in the consolidated budget of the PRC, as well as their dynamics relative to GDP, suggest a high degree of decentralization of the budget system, which, however, reflects the decentralization of budgetaryadministrative functions rather than the decentralization of budgetary powers and/or of fiscal policy formulation. Despite this fundamental difference from, in particular, the Russian situation, Chinese budget system currently faces a number of problems familiar to the domestic budget system. Among them is the problem of optimization of methods for calculating intergovernmental transfers, the problem of budget imbalances, the increase in public and quasi-public debt, especially at the lower levels of the budget system. These and other challenges dictate the directions of current and future changes in China’s fiscal system and fiscal policy.

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ECONOMIC ASPECTS OF FORMATION OF UNITED ELECTRIC POWER MARKETS

TERRA ECONOMICUS, , Vol. 16 (no. 3),

The paper deals with the economic aspects of the formation of the united electric power markets by the example of the common electricity market of the Eurasian Economic Union. It is shown that, in many respects, the integration processes taking place in the energy supply chain, the capacity of the cross-border transmission lines and the adopted model of its distribution in the common electricity market. An approach is proposed for modeling the distribution of the capacity of cross-border lines based on the auction method of determining prices.

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CONTRIBUTION OF REGIONS AND THEIR SECTORS TO THE FINANCIAL INSTABILITY OF THE RUSSIAN ECONOMY

TERRA ECONOMICUS, , Vol. 16 (no. 3),

The subject of this research is the financial instability of national economy and its sources. The study is aimed at assessment of contribution of various regions and types of economic activity (sectors) to the financial instability of the Russian economy in 2004–2016. The research hypothesis is that the contribution of regions and their sectors to the financial instability of country depends on intra-sectoral, intersectoral, intraregional and interregional covariances of financial return, as well as the scale of the region’s (industry’s) economy, its financial return and the relative volatility of this return. The portfolio approach, portfolio risk decomposition, correlation analysis and the construction of the Lorenz curve were used as research methods. As a result of the study, the sectoral and regional risk structure of the national economy was assessed. The regions and sectors that have made the greatest absolute and relative contribution to the financial instability of the country, as well as the regions and industries that have played the role of dampers of this instability were determined. A positive correlation of intra-sectoral risk and a negative correlation of inter-sectoral risk with financial return of regional economies and some of their sectors were revealed. The decomposition of the volatility of the country portfolio showed that the absolute contribution to the overall financial instability was made by the manufacturing industry and the real estate operations sector, and the latter, together with financial activity, also proved to be the largest volatility amplifiers. In the period under review, the mining industry showed a significant stabilizing role, while the agriculture and fisheries slightly mitigated overall volatility. The results obtained are applicable to the management of financial stability at the national and regional levels by means of changing the sectoral structure of the economy.

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A STUDY OF SUCCESS FACTORS OF WOMEN‘S LEADERSHIP IN E-COMMERCE

TERRA ECONOMICUS, , Vol. 16 (no. 3),

Women make up almost 50 percent of all workforce in the European Union countries, but their average hourly rate is 16,3 percent lower than men’s (respectively, in Lithuania it is 14,2 percent). In 2016, only in 21 companies out of 500, which is 4,2 percent, women held executive positions. In entrepreneurship statistics based on the founder’s gender, women make up only 34,4 percent of independently working employees and 30 percent of business founders. More women possess higher education than men, but only a small part of women hold executive positions or decide to establish their own business. Academic sources often analyze the success factors of women’s leadership in the context of managing large international companies, politics, medicine, war industry and education, whereas the factors of successful women’s leadership in small and medium-sized enterprises while establishing and developing e-commerce are rarely considered. That is why this study seeks to complexly evaluate the success factors of women’s leadership and to create a structure of success factors of women’s leadership in Lithuanian e-commerce. To achieve the objective of this study, such research methods as analysis of scientific literature, multiple criteria and expert assessment (structured survey and interview) were applied. While analyzing the success factors of women’s leadership in e-commerce in the scientific literature, 95 primary assessment factors, specified with 21 female experts who have established businesses in Lithuania, were identified through the multiple criteria and expert assessment method.

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SANCTIONS AND COUNTERS: THE VIEW OF THE LEFT

TERRA ECONOMICUS, , Vol. 16 (no. 3),

The article is an overview two books devoted on economic sanctions. Both books were edited by the famous Russian economist R. M. Nureev. These works are very different: the first is a conceptual criticism of Russian economic policy and the current world order, the second is devoted to evaluation of the effectiveness sanctions both against Russia in general and its individual sectors. At the base of the «Expectations and Reality» lies the world-system approach of I. Wallerstein, in which the Russian economy appears to be inscribed in the «semiperiphery» and is exploited by the countries of the world’s «core». Countries of the West as a recipient of benefits are interested in preserving the raw orientation of the Russian economy. A logical response from the semi-periphery countries should be protectionism and import substitution. Russia’s entrance to the WTO and trade liberalization took place under the pressure of global financial corporations. The current sanctions and the breaking of the existing ties prove the falsity of the policy of free trade conducted by the Russian governments. The work «Costs and Benefits» uses a positivistic treatment, there is not a normative model of an ideally functioning economy. It presents a large list of government measures characterizing the efforts to import substitution, an analysis of the preliminary results of the economic policy measures taken. Of particular interest is the study of the functioning of sectors that have been «under sanctions and counter-sanctions»: oil and gas, defense, banking, agro-industrial sectors. The consequences of the outbreak of the «trade war» are contradictory: some Russian enterprises are developing successfully, but for others, using imported technologies and components, hard times have come. The presented works vividly characterize the existing discourses of the domestic economic science and are of great interest both from the point of view of evaluations of the causes and consequences of sanctions, as well as ways of describing reality. A good tone is the criticism of the actions of the Russian government from the standpoint of economic dirigisme and the social state. At the same time, disproportions between income growth and labor productivity in the domestic economy are ignored.

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