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TERRA ECONOMICUS

Political connections of top entrepreneurs in the resource sector of the Russian economy: From qualitative analysis to quantitative studies


TERRA ECONOMICUS, , Vol. 21 (no. 4),

We provide a quantitative assessment of the political connections of top entrepreneurs in the resource sectorof the Russian economy. The study applies the methodology of New Political Economy. Top entrepreneursare considered as economic actors pursuing their interests not only on economic but on political marketsas well. Political actors, represented by political and administrative decision-making persons, are motivatedboth by “public” and “private” goals when interacting with the representatives of “big business”. Commonpractice shows that running any serious business in the resource sector without political connections isalmost impossible. This is about maximizing current commercial results as well as increasing the value ofassets in the long term. We reveal various forms that political connections take in the countries with differentinstitutional environments, along with the mechanisms through which firms benefit from them. Politicalconnections matter not only in low- and lower-middle-income economies, but also in high-income countries.Our analysis involves data on private entrepreneurs from ferrous and non-ferrous metallurgy, oil and gasproduction, chemical industry, woodworking and coal mining. The results indicate that although politicalconnections have a positive effect on asset value, but this effect does not differ across industries. In otherwords, there is no reason to assert that they play a greater role in the resource sector than in the non-resourcesector. This result can be explained with the fact that in Russia the running of any big business is impossiblewithout political connections. The crucial factor is the size of the business and not its industry affiliation.
Citation: : Levin S.N., Sablin K.S., Kislitsyn D.V. (2023). Political connections of top entrepreneurs in the resource sector of the Russian economy: From qualitative analysis to quantitative studies. Terra Economicus 21(4), 6–24 (in Russian). DOI: 10.18522/2073-6606-2023-21-4-6-24
Acknowledgment: The article is supported by Russian Science Foundation grant № 22-28-00717 «Political connections of top entrepreneurs and enclaves of wealth building in the resource sector of the Russian economy»

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Narratives about the Russian innovation system in the mass media


TERRA ECONOMICUS, , Vol. 21 (no. 4),

Analyzing narratives about the Russian innovation system can reveal how current interaction betweenactors contributes to or inhibits innovation development in modern Russia. The study aims to identify andcritically analyze narratives about the Russian innovation system to reveal key elements in the statementsof actors of the Russian innovation system. Comparison between the findings obtained through quantitativeand qualitative analysis is based on the frequency of certain lexemes or phrases, and the assessment ofsignificance of ideas circulating among the actors of the Russian innovation system. Using factor analysis, weidentified several micro-themes within two samples of narratives, extracted from: (1) rating media (problemsrelated to the development of the Russian economy and innovation activity, as well as the relationshipbetween science and innovation), and (2) specialized media (innovative business concerns and marketconditions for innovative development). Staffing of innovation activities is found to be associated with thedevelopment of science and education, on the one hand, and business, on the other. An unexpected resultwas that relevant micro-themes do not contain lexeme “intellectual property”. This fact is presumably dueto the relative inefficiency of intellectual property organizations and related institutional environment, withthe performance measurement framework compels the actors primarily towards formally defined indicators.
Citation: Volchik V.V., Maslyukova E.V. (2023). Narratives about the Russian innovation system in the mass media. Terra Economicus 21(4), 25–37 (in Russian). DOI: 10.18522/2073-6606-2023-21-4-25-37
Acknowledgment: This work was supported by the grant of Russian Science Foundation № 21-18-00562, https://rscf. ru/en/project/21-18-00562/ “Developing the national innovation system in Russia in the context of narrative economics” at the Southern Federal University

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Technological sovereignty: From conceptual contradiction to practical implementation


TERRA ECONOMICUS, , Vol. 21 (no. 4),

Technological sovereignty is on the agenda of both analytical perspectives and academic discussions. Current literature promotes the idea that the framework of technological sovereignty should be clearly separated from the model of economic autarky; it is argued that technological sovereignty is essentially a cooperative strategy, but with elements of state control. However, the return of state agency in the realignment of global technological chains inevitably extends the practices of technological protectionism and the blockfragmentation of international trade. This contradiction, we argue, follows the paradox of classical sovereignty. In this paper we consider both the conceptual foundations of technological sovereignty and the more practical aspects of ensuring it. At the conceptual level, we note that technological sovereignty is emerging in different countries in response to the proliferation of technological platforms that have become an unexpected source of extraterritorial institutional influence. This brings us to the problem of practical analysis of technological platforms, associated technology chains and the selection of key elements that should be supported by domestic R&D platforms. Criteria for selecting such elements may include the degree of commoditization and the minimum scale of implementation. As an example of an emerging tradition, we analyze the technology chain in the mobile telecommunications equipment sector. We find that securing technological sovereignty is inherently reactive in nature. It is associated with a failure of economic efficiency in the short run, but allows to reduce the risks of extraterritorial institutional influence in the long run.
Citation: Gareev T.R. (2023). Technological sovereignty: From conceptual contradiction to practical implementation. Terra Economicus 21(4), 38–54 (in Russian). DOI: 10.18522/2073-6606-2023-21- 4-38-54

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Economic agents and social institutions: A behavioral interaction model


TERRA ECONOMICUS, , Vol. 21 (no. 4),

The study aims to develop an agent-based model that reflects the interaction of economic agents with the system of economic institutions of society. The interaction of agents with institutions is considered a twoway process of establishing social norms corresponding to the mentality of agents and changing the valuepsychological structure of the mentality of agents under existing institutions. It is assumed that each agent finds himself in various situations of choice during his life activity in which he can adhere to one or another line (pattern) of behavior. On the one hand, his behavior is influenced by the initial value attitudes, and on the other hand, by the institutional norms that apply in this situation. Economic utility (benefit) plays an essential role in this process, influencing the agent’s decision regarding following the dominant institutions in society and forcing him to risk his own reputation. The proposed system of coordinates “mentality – institutions” gives us a new description of the development of civil society in the country. In a developed society, the mentality of people and formal institutions do not contradict each other and are in balance (harmonious state). At the other extreme, there is a situation where each agent pursues only his interests. Various intermediate (transitional) configurations are also possible, where there is a struggle between formal and informal institutions and individual, group, and public interests. The result of the study is an agent-based model implemented on experimental data, which makes it possible to assess the degree of mutual influence of the mentality and civil society institutions and formulate conditional recommendations for bodies developing the country’s social and economic policies.
Citation: Kleiner G.B., Rybachuk M.A., Ushakov D.V. (2023). Economic agents and social institutions: A behavioral interaction model. Terra Economicus 21(4), 55–68 (in Russian). DOI: 10.18522/2073- 6606-2023-21-4-55-68
Acknowledgment: The study is supported by the Ministry of Science and Higher Education of the Russian Federation (project “Latest Trends in the Development of Human and Social Sciences in the Context of Digitalization and New Social Problems and Threats: An Interdisciplinary Approach”, Agreement № 075-15-2020-798).

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Yuanization of the Russian economy: Politicization of the discourse


TERRA ECONOMICUS, , Vol. 21 (no. 4),

The geopolitical upheavals of 2022 have made Russiaʼs economic turn to the East inevitable. Statistics 2022–2023 testifies: Russia began to play an important role in the process of internationalization of the yuan. If previously the yuan entered the international payment’s structure “Crossing the river by touching the stones”, then Russia shows an explosive displacement of the American dollar by other currencies, primarily the yuan. In the socio-political discourse, one can find both the concerns of domestic authors regarding the excessive growth of Russia’s dependence on its eastern neighbor, as well as the Western authors comments characterizing the problem in terms of vassal dependence. Politization of the problem obviously shifts the emphasis from the economic side towards the discussions about the national sovereignty risks. Regarding the use of the yuan in the Russian financial market, this is manifested in the term «yuanization» in the socio-political discourse. Appearing in journalisms, it involuntarily causes cognitive distortions regarding the described reality, since it implies a process of dominance of foreign currency in the country’s financial system, mirroring the previous phenomenon of dollarization. The “yuanization” discourse contradicts both the public position built by the Russian authorities. We assume that the emerging discourses and narratives have a direct impact on the formation and functioning of financial institutions, and we show the inconsistency of todayʼs discourse, which probably shapes the inconsistency of prospects for the development of the Russian financial system.
Citation: Volynskiy A., Kruglova M., Nikitina S., Slavinskaya O. (2023). Yuanization of the Russian economy: Politicization of the discourse. Terra Economicus 21(4), 69–79 (in Russian). DOI: 10.18522/2073-6606-2023-21-4-69-79

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Comparing the approaches to state regulation of foreign trade (The case of Russia after the Crimean War and the United States after the Civil War)


TERRA ECONOMICUS, , Vol. 21 (no. 4),

The post-war economy in any country and in any historical era faces a relatively standard set of consequences (burden on the state budget, inflation, etc.). Examples of state regulation of foreign trade in Russia after the Crimean War and in the United States after the Civil War are interesting both in the opposite direction and, as a result, in the opposite results. For an economist, such a comparison is also interesting because these two wars take place in close periods of time and the chronological framework for studying the recovery of the economies of the two countries after the wars is also close, thereby defining the external factors of economic development as ceteris paribus. The purpose of the article is to compare the results of state regulation of foreign trade in Russia during the twenty years after the end of the Crimean War (from 1856 to 1876) and in the USA during the twelve years after the end of the Civil War (from 1865 to 1876). In achieving research objectives, traditional economic history methods were used: problem-chronological, systemic, comparativehistorical. A world systems approach was also used to analyze the causes of war in both countries. Comparison of approaches to the state regulation of foreign trade in Russia and in the United States in the second half of the 19th century shows that the U.S. implemented a foreign trade regulation policy aimed at maintaining and protecting domestic industry, which led to economic growth and an increase in the welfare of the population. But in Russia, the policy of foreign trade adhered to a greater extent to free trading and the emphasis in state regulation was placed on monetary methods.
Citation: Epifanova N.S. (2023). Comparing the approaches to state regulation of foreign trade (The case of Russia after the Crimean War and the United States after the Civil War). Terra Economicus 21(4), 80–90 (in Russian). DOI: 10.18522/2073-6606-2023-21-4-80-90

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The social capital of Russian society: A year under a special military operation


TERRA ECONOMICUS, , Vol. 21 (no. 4),

In the article, based on the data of the all-Russian survey of the Institute of Sociology of the Federal Research Center of the Russian Academy of Sciences in 2023, it is shown that the everyday communication practices of Russians increasingly include intergroup social contacts, and this has a positive effect on the state of various components of social capital. It has also been demonstrated that a high level of intra-group trust is still maintained in the country, however, during the COVID-19 pandemic and it’s in Ukraine, this indicator has significantly decreased. Nevertheless, a high level of interpersonal trust and intergroup interactions have a positive effect on the development of social networks, from which most Russians expect help. For their part, they are basically also ready to help members of their networks, at least in a household form. This willingness to help in most cases is converted into real help. It is also demonstrated that the structure of the Russiansʼ social networks themselves is asymmetric – their “esource base“ consists mainly of a small group of high-resource donors, which are fewer than recipients of aid. It is donors who are the key “nodes” of social networks and provide resource exchange in them, while at the same time being the main beneficiaries of significant types of assistance in them. It is also shown that over the period of special military operation in Ukraine, the resource potential of Russiansʼ social networks has noticeably decreased, there are fewer donors in them. As a result, despite the developed social capital of Russians, expressed in a high level of interpersonal and intergroup trust, as well as in the branching of their social networks, many members of these networks may face a lack of support from them in the future, and, as a result, disappointment, and loss of trust in their environment. The first signs of such a development are already being traced.
Citation: Karavay A.V. (2023). The social capital of Russian society: A year under a special military operation. Terra Economicus 21(4), 91–105 (in Russian). DOI: 10.18522/2073-6606-2023-21-4-91-105
Acknowledgment: The article was supported by the Russian Science Foundation project № 20-18-00505 “The influence of intangible factors on the consolidation of Russian society in the context of new socio-cultural challenges and threats”

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Application of ARDL model to capture the differences in causal relations operating in crop production across geographic regions: A study on Latin America and South Asia


TERRA ECONOMICUS, , Vol. 21 (no. 4),

The identification of the causal relations between the determinants of crop production and the crop production index has serious policy implications. Given the importance attached to agriculture in Latin America & Caribbean Islands and Southern Asia, understanding the differences in the causal relations operating in crop production in both the regions is necessary, especially to capture the policy differentials, if any required, to combat underdevelopment. With this backdrop, the present study aims to figure out the differences between both the regions in the nature of causal relations existing among select factors associated with the crop production. The study is based on the World Bank data. The model used in the present study consists of a dependent variable in the form of crop production index that has dependence on its lagged values. The dependent variable is also influenced by the lagged values of a set of independent variables – share of permanent crop land in total land available in the region, fertilizer usage, carbon dioxide emission and GDP growth per capita. The study uses auto regressive distributed lag (ARDL) model for data analysis. The study finds that in Latin America & Caribbean Region no long run relations exist between the dependent and the independent variables, while in South Asia significant long run relations exist between them.
Citation: Neogi D. (2023). Application of ARDL model to capture the differences in causal relations operating in crop production across geographic regions: A study on Latin America and South Asia. Terra Economicus 21(4), 106–122. DOI: 10.18522/2073-6606-2023-21-4-106-122

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Institutional factors of international trade: A case of the European Union’s Generalized System of Preferences and World Trade Organization


TERRA ECONOMICUS, , Vol. 21 (no. 4),

International trade, a cornerstone of global economic activity, is significantly influenced by institutional framework. This framework comprises a complex array of policies, agreements, and regulations that govern the interaction between nations in the global marketplace. One prominent example of an institutional factor that drives international trade is the European Union (EU) that created one of the largest single markets in the world through its internal market with free movement of goods, services, capital, and labor. The World Trade Organization (WTO) is yet another institutional factor that significantly shapes international trade. In 2014, the European Union established the Generalized System of Preferences (GSP) which sought to provide eligible developing countries with preferential access to the European market by reducing or suspending tariffs on certain imported goods. However, since its formation, it has been questioned whether GSP (later extended to GSP+) is in accordance with the World Trade Organization (WTO) law. This paper explores the role of institutional framework in driving international trade dynamics, highlighting its impact on trade policies, market access, and economic development. In particular, we analyze whether the current EU’s GSP aimed to boost sustainable development and good governance is compatible with the entrenched institutions of international trade represented by the WTO rules and laws. We find that despite some contentious elements, no disruptions can be found. Nevertheless, it is crucial for the EU to address and reform the GSP to continuously increase its effectiveness.
Citation: Miadoková N., Rýsová L. (2023). Institutional factors of international trade: A case of the European Union’s Generalized System of Preferences and World Trade Organization. Terra Economicus 21(4), 123–134. DOI: 10.18522/2073-6606-2023-21-4-123-134
Acknowledgment: This paper was supported by the Grant KEGA No. 008UMB-4/23 “The European Union’s position in the world economy – current situation and future prospects. Compendium of study materials for university study programs”

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Regional cooperation in higher education and research in the Southern and Eastern Mediterranean countries


TERRA ECONOMICUS, , Vol. 21 (no. 4),

Higher education and research represent the driving forces for economic and institutional change in both developed and developing countries all around the world. The countries of the Southern and Eastern Mediterranean (SEMCs) are not an exception from this case as they are making notable efforts to enhance the institutional reform of higher education. Despite many positive results, these countries have still failed to join the era of the technological revolution, which would allow them to correct their disadvantageous position in international trade, as well as to adequately develop and use human resources. Our paper focuses on the importance of regional cooperation in higher education and research for economic, social, and institutional development in the SEMCs. We demonstrate that universities in developing countries face greater challenges than their counterparts in the developed countries. We focus on assessing the European Union’s (EU) efforts and contribution to the Euro-Mediterranean integration and institutional change since the future development of the Mediterranean countries is linked to the European integration processes. Finally, the paper outlines recent trends in the interconnection between regional integration in the EU and the Mediterranean. Our results might be of special interest for the policymakers and academics in the field of higher education and regional economics.
Citation: Huraj Rošteková M., Masár D. (2023). Regional cooperation in higher education and research in the Southern and Eastern Mediterranean countries. Terra Economicus 21(4), 135–148. DOI: 10.18522/2073-6606-2023-21-4-135-148
Acknowledgment: This paper was supported by the Grant VEGA No. 1/0320/21 “The role of universities in building a knowledge economy”

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