Investment Climate Assessment Research Articles

Investment climate assessment standards’ impact on the gross regional product growth of the Russian Federation subjects

The study purpose is to identify the relationship between the provisions’ implementation of the regional investment standard and the growth of the gross regional product (GRP) in the Russian Federation subjects. The average values’ statistically significant deviation of the GRP dynamics in 11 pilot regions of the Russian Federation and other subjects of the Russian Federation as an introduction result of regional investment standards developed by the Agency for Strategic Initiatives for the Promotion of New Projects (ANO “ASI”) together with the Ministry of Economic Development of the Russian Federation has been summarized. It is established that there is a statistically significant difference in the dynamics of the average GRP of the pilot and other regions of the Russian Federation, due to the implementing process of the provisions of the ANO “ASI” Standard. The provisions’ introduction of the ANO “ASI” Standard since 2012 has caused a statistically significant difference in the dynamics of the average GRP of the pilot and other regions of the Russian Federation. In fact, a significant outstripping dynamic of macroeconomic indicators for the development of pilot regions has not been achieved. The revealed situation testifies to the uneven movement of financial flows in the Russian Federation: about 45.8%of the profit of organizations falls on Moscow and St. Petersburg (2021). Despite the lack of outstripping dynamics of GRP and investments in fixed assets in comparison with the average value in the Russian Federation, the pilot regions managed to ensure a more stable dynamics of GRP in 2020. Despite the presence of partially lagging macroeconomic indicators’ dynamics of the pilot Russian Federation regions in comparison with the average values for the Russian Federation, the introduction of regional investment standards is an important condition for effective interaction between territorial authorities and a wide range of investors.

Econometric Assessment of Russia's Investment Climate in Context of Sanctions Pressure on its Economy

Econometric Assessment of Russia's Investment Climate in Context of Sanctions Pressure on its Economy

Оценка инвестиционного климата Брестской области

Оценка инвестиционного климата Брестской области

Problems of investment climate assessment in an age of informationa glut

The article presents a comparative assessment methodology of the investment climate (country, region, city, etc.). Unlike current approaches and methods for investment climate assessing the authors take into account not only the investment attractiveness which is formed on the basis of investment potential and investment risk, but also the investment activity. The research purpose is to calculate integral comparable indicators for the EAEU members taking quantitative data and expert assessments as a base. As a result of the research a rating of the EAEU country’s investment attractiveness was compiled. The analysis carried out by the authors showed that the Republic of Belarus in comparison with their main trading partners (Russia and Kazakhstan) has rather low production, innovation and natural resource potentials, as well as high economic and political risks. The results of the study allow identifying barriers restraining the inflow of foreign investment in the Republic of Belarus. The baseline data are statistical information published by the statistical committees of the member countries of the Eurasian Economic Union, as well as media materials, analytical reviews of research centres.

The Trends and Prospects of Leasing Development as a Relevant Financial Tool of Investments in the Southern Regions of Russia

Leasing owing to the unique economic essence is considered to be a booster for economic, innovation and investment business activity of any level. In the conditions of competition, economic subjects are constantly in search of innovative approaches to business operations and effective distribution of financial resources. This determines the demand for leasing as an efficient way to make investments into business. The relevance of the research regarding prospects of leasing development at the regional level does not raise doubts as the issue of sources of new investments into the real sector of Russian economy is particularly urgent today. Consequently, one of the ways to solve this issue is to apply new financial instruments of production, investment leasing in particular. In modern Russian economy the real investments can be raised by means of leasing which are quite necessary for modernization of fixed assets in various branches, including those in the most vulnerable links of the Russian economy. This paper presents the results of analyzing a tendency and features of leasing market development on the national and regional levels. The authors have given an assessment of investment climate in the Southern regions and systemized the factors on the basis of which both the general risks and the specific regional risks are marked out. As a result of assessing the experience of leasing functioning, some regional features have been revealed, drivers and development prospects of the leasing mechanism in the southern regions hev been defined. Furthermore, the positive approaches which should be put into practice have been revealed. Some points of growth ahave been defined in various segments of business based on the influencing support factors. As examples of growth drivers we can consider auto leasing, leasing of agricultural machinery, operating leasing, leasing for individuals and a financial supermarket. On the basis of generalization of possible ways that we can use to develop the regional leasing market there are directions to improve the realization of leasing mechanism on the regional level which can be used in practice.

The investment climate in Latvia's, Lithuania's and Belarus's cross-border regions: the subjective-objective assessment

As the world experience indicates, the favourableness of investment climare or, in other words, a region’s entrepreneurial environment determines a region’s sustainable development. First assessments of investment climate were developed and applied by western experts in the middle of the 1960s. They were based on the subjective assessment of countries’ characteristics. The further development of the methodology for comparative assessment of countries’ investment climate started to expand and complicate the system of characteristics assessed by experts, and to introduce objective statistical indexes. In recent decades, more research into investment climate at the level of regions appeared, as a result of the understanding of a specific and unique character of regional features, as well as its dramatic differences from the country as a whole. It is possible to distinguish objective, subjective, and subjective-objective metholologies for assessment of investment climate. According to the outcomes of the subjective-objective assessment of the investment climate in Latvia’s (Latgale), Lithuania’s (Vilnius, Alytus, Utena, Panevezys, and Kaunas counties), and Belarus’s (Vitebsk, Grodno, Minsk, Brest oblasts, and Minsk city) cross-border regions, the regions under study were divided into 4 groups in accordance with W.Zapf’s Well-being Typology Matrix: 1) low objective and subjective indicators – Deprivation, 2) low objective indicators and high subjective indicators – Adaptation, 3) high objective indicators and low subjective indicators – Dissonance, 4) high objective and subjective indicators – Well-being.

Method for Diagnostics, Assessment, and Analysis of Investment Climate and Risks

The paper suggests the author's method of analyzing the investment climate and assessing unsystematic investment risk. The authors propose an original non-traditional approach to the solution of two interrelated problems: investment climate diagnostics and investment risk level evaluation. The technique can be applied by both an investor for making an investment decision and an issuer for analyzing reasons of the low investment object attractiveness. It makes it possible to identify the barrier and restrictive factors determining a high risks and to develop measures to reduce them. The advanced algorithm, step-by-step methodology, and decision support system for assessing investment climate and unsystematic investment risk were described and formalized in the paper. Scientific and practical significance lies in the fact that the complex analysis and evaluation method proposed allows management decisions to be argued. the author’s technique will significantly reduce the role of the subjective factor caused by expert evaluation and uncertainty factors, improve the validity and reliability of the investment climate and risk assessments, and help to make an adequate decision about risk elimination.

Комплексная оценка инвестиционного климата территорий субъектов Российской Федерации

Комплексная оценка инвестиционного климата территорий субъектов Российской Федерации

Improving methods estimation of the investment climate of the country

This article discusses the key problems of assessing the country’s investment climate. The subject in the light of recent political events, has received increased attention. For reasons of increasing political tensions between Russia and the West, the investment activity is significantly reduced among foreign investors in our country. Studies have shown that the main problems of the current investment climate assessment methodologies are objectivity, comprehensiveness, relevance and comparability of proposed assessments. This article provides a mechanism for solving the above problems by using a multifactor model of investment attractiveness. The information base for the study served as the official annual statistical reports and bulletins of international organizations such as: IBCA, Moody’s, Standard & Poor’s, Monetary Fund, OPEC, UNCTAD, UNESCO, World bank, etc. The key theoretical positions on the assessment of the investment climate in the country were presented the results of the analysis reports and reviews of the international consulting company Ernst and Young and Deloitte, the official Internet resource of Russian and international business publications: Euromoney, Fortune, The Economist, The Financial Times, BBC, Bloomberg, RBC, Vedomosti and Komersant. The reliability and validity of scientific statements, conclusions and recommendations contained in this article provides the correct use of sufficient analytical and statistical information on the directions of research. In this article, the key attention is paid to the method of mathematical modeling and forecasting. With the introduction of the multiplicative model, where the multipliers are the separately calculated factors and potential risk factors, it is planned to bring the most accurate and objective evaluation model of investment climate in the country. The results articles as data and mathematical models will allow foreign investors to use the most objective assessment of the investment climate in the country in order to build their strategies market functioning. The article describes two methods to obtain an estimate of the investment climate, a fundamental and expertise. Studies have shown that the fundamental method provides the most accurate and objective assessment of, but not all of the investment potential factors can be subjected to mathematical evaluation. The use of expert opinion on the practice of subjectivity difficult to experts, so its use requires special care. In modern economic practice it proved that the investment climate elements directly affect the investment decisions of companies. Improving the investment climate assessment methodology, it allows you to build the most optimal form of cooperation between investors from the host country. In today’s political tensions, this path requires clear cooperation of subjects, both in the domestic and international level. However, now, these measures will avoid the destabilization of Russia’s relations with foreign investors.

Attitude to the National Leader Through the Lenses of Investment Climate Assessment: The Case of Russia

This paper considers two issues. First, it evaluates the changes in Russia’s investment climate in 2012-2014 after the announcement of an ambitious governmental program to improve the conditions for doing business. Second, because the relevant reforms were personally initiated by Vladimir Putin, we carried out a survey experiment designed to find out how references to a popular politician influence respondents’ opinions about the business climate. We used the data of a large-scale survey of top managers in Russian manufacturing sector conducted in July-October of 2014. Contrary to the World Bank report, Easy Doing Business, our empirical data shows that there was practically no improvement in the investment climate in Russia in 2012-2014. Also contrary to the results of population surveys showing extremely high public support for Vladimir Putin after Crimea’s accession to Russia, our survey experiment demonstrated that referring to the President Putin as the initiator of business climate reform improves assessments of the business climate change only slightly. However, the effect of reference to the President’s initiative differs significantly for firms from different size groups – we revealed no effect of question wording in the group of small firms, much higher share of non-answers in the group of large firms and a significant increase in the share of positive assessments of business climate among mid-size firms when Vladimir Putin was mentioned.

Factor Model of Investment Climate Monitoring in Chaotically Structured Economy

Methodical approaches to the investment climate assessment, which are used by leading national agencies and international organizations for ranking countries have been considered in this article, the need for indexes analysis of Ukrainian investment climate in order to identify the further ways of institutional environment improvement for attracting foreign investments improving the efficiency of the control system of the Ukraine's economy investment climate has also been identified. Monitoring of Ukraine's economy investment climate, presented by factor model, has been proposed. Implementation of monitoring systems will help to ensure the comprehensive nature of its functioning in Ukraine's economy.

Regional Investment Climate Assessment Based on Business Perception

The study presents a new approach to the regional investment climate assessment based on the business perception of key investment climate topics including finance, supply and demand conditions, labor market and institutional framework. The offered approach is tested on data of firm-level survey conducted in the Republic of Ingushetia. This region is associated with a high level of investment risk due to some cases of terrorist activity during the 1990's and the 2000's. In real fact, modern Ingushetia has quite stable criminal situation, and the regional investment climate is similar to other Russian regions. Our empirical research prove that the major investment constraint results from the failure of the state to protect businesses. The two other constraints necessary to consider are difficult access to debt financing and unskilled labor force.

The Constraints to Industry in Punjab, Pakistan

This paper identifies the main impediments to investment and industrial productivity in Punjab, which have led to a decline in growth. This is done by analyzing the impediments and constraints to productivity and investment using the World Bank’s 2007 Investment Climate Assessment (ICA) data at the level of Punjab’s seven main industrial zones. This is followed by an analysis of a pilot survey of 100 firms conducted in the Lahore district. Almost 71 percent of the firms surveyed declared electricity to be the most important constraint and macroeconomic stability was ranked as the second-most important constraint. An inadequate workforce, access to raw materials, and corruption were ranked third, fourth, and fifth, respectively.

Financing Constraints: Determinants and Implications for Firm Growth in Pakistan

This study has a twofold objective: (i) to investigate the determinants of firm growth, specifically the extent to which finance constrains enterprise growth; and (ii) to explore the determinants of external financial access in Pakistan. External financial access is defined as access to credit through institutional sources such as private commercial banks, nonbank financial institutions, and state-owned banks and agencies. The study uses data from the second round of the Investment Climate Assessment Survey conducted by the World Bank in FY 2007. The methodology entails using an instrumental variable approach to estimate the impact of external financial access on firm growth while employing a probit model to explore the determinants of external financial access. The results suggest the following: First, finance is a binding constraint to firm growth in Pakistan—a 10 percent increase in the working capital financed through external sources is predicted to increase the average annual growth rate by 5.6 percentage points. Second, financial depth is important for access—across the country, access is better where there is greater penetration of financial infrastructure. Third, a range of internal factors such as size, export status, quality of human capital, and organizational form emerge as important determinants of external financial access in Pakistan.

Are Managers’ Perceptions of Constraints to Growth Reliable? Evidence from a Natural Experiment in South Africa

Can surveys of what managers see as the biggest problems that their firm faces provide useful information on the main constraints to private sector and economic development and be used to prioritize reforms in these areas? One of many concerns about doing this is that managers’ responses to questions about specific areas of the investment climate might reflect their assessment of overall investment climate or their overall business confidence rather than their views on that specific area of the investment climate. This paper uses a natural experiment in South Africa to assess whether this is the case. When the World Bank’s 2007-2008 Enterprise Survey was being carried out, a major electricity crisis hit South Africa. The crisis resulted in many more managers saying that power was a serious constraint on enterprise operations - the share rose from about 10 percent of managers before the crisis to close to 50 percent after the crisis. But it also resulted in greater concern about most other areas of the investment climate - including areas such as taxation, regulation, and other areas of infrastructure that were unrelated to the crisis. This suggests that managers do not fully compartmentalize their responses. Moreover, the changes were large enough to suggest that cross-time and cross-country comparisons of perception data will be difficult.

Corruption, firm growth and export propensity in Kenya

PurposeThis paper draws from research that sought to explore the structure of corruption in Kenya and its implications on the performance of firms.Design/methodology/approachThe research takes the form of descriptive and econometrics analyses of Investment Climate Assessment data sets.FindingsKenyan manufacturers spent significant proportions of their annual sales on unofficial payments including kick‐backs on government contracts. There is also evidence of co‐movement between such unofficial payments and red‐tape, suggesting that corruption does not play any greasing function. Not only does corruption undermine firm growth but also reduces the propensity to export. The findings uphold others that demonstrate the deleterious consequences of corruption.Research limitations/implicationsFurther work is needed in tidying up the methods of collecting corruption data. Although a battery of strategies was used to reduce potential response biases common in corruption data, the information leans towards perceptions so that the findings remain tentative.Practical implicationsThe results should be of interest to policy makers and researchers and should put the fight against corruption on a firmer footing.Originality/valueThe paper establishes that corruption undermines the performance of firms.

Enterprise Size, Financing Patterns and Credit Constraints in Brazil: Analysis of Data from the Investment Climate Assessment Survey

This paper investigates the importance of firm size with respect to access to credit relative to firm performance, and other factors which may affect creditworthiness such as management education, location, or the industrial sector to which the firm belongs. The principal findings are that size strongly affects access to credit, compared to performance as well as other variables, suggesting quantitative limitations to credit access. Looking at short-versus long-term loans, the impact of size on access to credit is greater for longer-terms loans. Further, looking at the ownership of the lending institution, it is found that public financial institutions are more likely to lend to large firms. Finally, examining the role of financial constraints relative to other constraints faced by the firm it is found however that financial access constraints may have a less significant differential impact across firms of different sizes than other constraints though cost of finance as a constraint is very important. The authors are grateful to Thorsten Beck, Gledson Carvalho, Soumya Chattopadhyay, Marianne Fay, Luke Haggarty, Patrick Honohan, Leora Klapper, Leonid Koryukin, John Nasir, Maria Soledad Martinez Peria, Mark Thomas, and Jose Guilherme Reis for their valuable comments on earlier versions.

Transaction Costs of Credit to the Small-Scale Sector in the Philippines

Previous articleNext article No AccessTransaction Costs of Credit to the Small-Scale Sector in the PhilippinesKatrine Anderson Saito, and Delano P. VillanuevaKatrine Anderson Saito Search for more articles by this author , and Delano P. Villanueva Search for more articles by this author PDFPDF PLUS Add to favoritesDownload CitationTrack CitationsPermissionsReprints Share onFacebookTwitterLinkedInRedditEmail SectionsMoreDetailsFiguresReferencesCited by Economic Development and Cultural Change Volume 29, Number 3Apr., 1981 Article DOIhttps://doi.org/10.1086/451275 Views: 23Total views on this site Citations: 19Citations are reported from Crossref Copyright 1981 The University of ChicagoPDF download Crossref reports the following articles citing this article:K. Vidyarani, T. Maheshkumar Determinants of Access to Formal Credit for the Micro, Small and Medium Enterprises in India: An Inter-regional Analysis, SEDME (Small Enterprises Development, Management & Extension Journal): A worldwide window on MSME Studies 49 (Jun 2022): 097084642211062.https://doi.org/10.1177/09708464221106273Salman Wahab, Adnan Safi, Zeeshan Wahab, Nawaz Ali Shah, Xibao Zhang Choice between formal and informal financing in cottage industry firm: The application of robust regression, Journal of Public Affairs 22, no.11 (Aug 2020).https://doi.org/10.1002/pa.2241Meenakshi Rajeev, B. P. Vani, Veerashekharappa Group lending through an SHG bank-linkage programme in India: transaction costs and social benefits, Development in Practice 30, no.22 (Aug 2019): 168–181.https://doi.org/10.1080/09614524.2018.1508418Christian Masiak, Joern H. Block, Alexandra Moritz, Frank Lang, Helmut Kraemer-Eis How do micro firms differ in their financing patterns from larger SMEs?, Venture Capital 21, no.44 (Apr 2019): 301–325.https://doi.org/10.1080/13691066.2019.1569333Guye Gelgelu Deksiso Assessment of the factors affecting the performance of micro and small scale enterprise: The case of Wolkite town, Guraghe zone, Southern Ethiopia, Journal of Development and Agricultural Economics 10, no.66 (Jun 2018): 192–199.https://doi.org/10.5897/JDAE2017.0899Daniel Domeher, Godwin Musah, Kwasi Poku Micro determinants of the extent of credit rationing amongst SMEs in Ghana, International Journal of Social Economics 44, no.1212 (Dec 2017): 1796–1817.https://doi.org/10.1108/IJSE-03-2016-0089Yuko Nikaido, Jesim Pais, Mandira Sarma What hinders and what enhances small enterprises’ access to formal credit in India?, Review of Development Finance 5, no.11 (Jun 2015): 43–52.https://doi.org/10.1016/j.rdf.2015.05.002Yuko Nikaido, Jesim Pais, Mandira Sarma What Hinders and What Enhances Small Enterprisess Access to Formal Credit in India?, SSRN Electronic Journal (Jan 2015).https://doi.org/10.2139/ssrn.2557900Nelson F. Souza-Sobrinho Macroeconomics of bank interest spreads: evidence from Brazil, Annals of Finance 6, no.11 (Sep 2009): 1–32.https://doi.org/10.1007/s10436-009-0131-0I. Hashi, V. Z. Toçi Financing Constraints, Credit, Rationing, and Financing Obstacles: Evidence from Firm Level Data in South Eastern Europe, (Jan 2010): 62–97.https://doi.org/10.1057/9780230302211_4S. Safdar Hosseini, Mohammed Khaledi, Richard Gray An analysis of transaction costs of Islamic banks in rural Iran, Agribusiness 25, no.33 (Mar 2009): 291–313.https://doi.org/10.1002/agr.20211Machiko Nissanke, Ernest Aryeetey Institutional Analysis of Financial Market Fragmentation in Sub-Saharan Africa: A Risk-Cost Configuration Approach, (Jan 2008): 112–145.https://doi.org/10.1057/9780230594012_6Anjali Kumar, Manuela Francisco Enterprise Size, Financing Patterns and Credit Constraints in Brazil: Analysis of Data from the Investment Climate Assessment Survey, SSRN Electronic Journal (Jan 2007).https://doi.org/10.2139/ssrn.960152Barrie Pettman, Gamini Herath Analysis of the potential and problems of new institutional economics for third world development, International Journal of Social Economics 32, no.1010 (Oct 2005): 877–892.https://doi.org/10.1108/03068290510618515Martin Petrick Empirical measurement of credit rationing in agriculture: a methodological survey, Agricultural Economics 33, no.22 (Sep 2005): 191–203.https://doi.org/10.1111/j.1574-0862.2005.00384.xJohn DEVEREUX, Raymond P. H. FISHE AN ECONOMIC ANALYSIS OF GROUP LENDING PROGRAMS IN DEVELOPING COUNTRIES, The Developing Economies 31, no.11 (Mar 2007): 102–121.https://doi.org/10.1111/j.1746-1049.1993.tb00995.xAlbert Berry, Dipak Mazumdar Small-Scale Industry in the Asian-Pacific Region, Asian-Pacific Economic Literature 5, no.22 (Sep 1991): 35–67.https://doi.org/10.1111/j.1467-8411.1991.tb00048.xDennis Anderson Small industry in developing countries: A discussion of issues, World Development 10, no.1111 (Nov 1982): 913–948.https://doi.org/10.1016/0305-750X(82)90034-1Shazida Jan Mohd Khan, Abdul Rahim Anuar Access to Finance, (): 92–111.https://doi.org/10.4018/978-1-5225-2835-7.ch006