Financial Mechanism of Forming an Economic System of Sustainable Industrial Growth in Russia

Poletaeva, Vladislava and Smulov, Alexey and Pásztor, Szabolcs (2020) Financial Mechanism of Forming an Economic System of Sustainable Industrial Growth in Russia. POLGÁRI SZEMLE: GAZDASÁGI ÉS TÁRSADALMI FOLYÓIRAT, 16 (1-3). pp. 378-391. ISSN 1786-6553

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Abstract

This study aims to identify a potential mechanism to enable transformation of Russia’s economy from the inefficient export-oriented and raw-materials-based model into an economic system of sustainable industrial growth. Based on the studies done by Russia’s leading researchers, a conclusion was made that in order to reach the objective it is necessary to activate financial mechanisms. Due to a variety of challenges that emerge in the implementation of the financial mechanisms available, the authors propose a scheme based on collaboration between the banking sector and the state that will ensure the interests of the three key participants to an investment project – a bank, a manufacturing company and an authorised government institution. This mechanism can be a promising alternative to bank- or public-only financing of the economy, as it factors in their advantages. This article analyses the interests of stakeholders of the bank and the manufacturing company. Based on the analysis, the authors set the task to optimise determining the extent banks and authorised government institutions should participate in project financing with due account taken of the credit institution’s risk minimisation and achieving acceptable profit levels.

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