Substitution Policy Research Articles

State support of the agro-industrial complex as a way to implement the policy of import substitution and development of foreign economic activities

The topic of state support for the agro-industrial complex is especially relevant in the face of sanctions pressure and destabilization of the domestic economy. The purpose of writing this paper is to identify measures of state support for the agro-industrial complex as part of the implementation of the strategy of import substitution and the development of foreign economic activity of domestic companies. The author analyzes the theoretical foundations of import substitution and foreign economic activity as categories of scientific analysis, reveals the specifics of the concepts under consideration and the current conditions for the implementation of state support for the agro-industrial complex. On the basis of the analysis, the author identified the directions of the state implementation of measures that regulate foreign economic activity. The principles and legal frameworks of administration and control of the foreign economic activity of domestic companies are studied, it is revealed that at the present stage the volume of agricultural products stocks is sufficient to implement the import substitution strategy and ensure the development of foreign economic activity. It is important to note that when considering the dynamics of grain production in the period from 2017 to 2021, the author revealed that Russia in the 2020/21 agricultural year remains the largest exporter of wheat, while experts argue that the upward trend will continue in the medium term. To implement the import substitution strategy and develop the foreign economic activity of domestic companies, it is necessary not only to provide them with support from the state, but also to implement a policy aimed at improving the quality of domestic products — this will not only increase the competitiveness of domestic companies, but also improve their foreign economic activity. In conclusion, the author formulates conclusions regarding the foreign economic activity of domestic companies in the segment of agro-industrial production on the example of the export of fish products.

АНАЛИЗ ПРАКТИКИ ИМПОРТОЗАМЕЩЕНИЯ В РОСТОВСКОЙ ОБЛАСТИ НА ПРИМЕРЕ РАЗВИТИЯ ПРОМЫШЛЕННОГО СЕКТОРА ЭКОНОМИКИ

he article sets the task of developing theoretical and methodological provisions and scientific and practical recommendations for the development of import substitution policy in Rostov region. As a result of the analysis of industrial policy of Rostov region, the main problems and risks of the import substitution were identified, proposals were prepared to stimulate it. The authors argue the main prospects and resources for stable development of the economy of Russia and the Rostov region in modern realities.

Comparative analysis of bank lending to non-financial corporations under the conditions of inflation targeting

The influence of the interest policy of the National Bank of Ukraine on the dynamics of lending to non-financial corporations during the period of using the monetary regime of fixed exchange rate and inflation targeting is considered. It has been proven, that the use of the symmetric corridor of the interest policy of the National Bank of Ukraine has a negative effect on the volume of lending to non-financial corporations, since high rates on deposit certificates of the National Bank of Ukraine create a risk-free and highly profitable instrument for the placement of bank assets, which discourages lending to the real sector of the economy. The absence of a connection between the interest rate policy and the dynamics of the consumer price index and the money supply during the period of inflation targeting is substantiated, which made it possible to prove the low level of effectiveness of the chosen monetary regime.
 The aim of the article is to study the problems of bank lending to non-financial corporations of Ukraine in the conditions of inflation targeting and to develop proposals for its stimulation, taking into account foreign experience.
 Methods. The methodological basis of the work is the dialectical method of cognition, the position of the theory of monetary policy and credit. The work uses methods of economic and mathematical statistics and methods of correlation analysis to analyze the features of lending to non-financial corporations and the impact of inflation targeting on the dynamics of bank lending; generalization methods for formulating research conclusions.
 Results. The monetary regime of inflation targeting is quite often recommended by the International Monetary Fund for implementation in countries with emerging markets as a basic set of central bank tools for regulating inflation and ensuring price stability. However, in conditions of import dependence of the national economies of countries with emerging markets, in addition to changes in the money supply and credit activity of banks, the dynamics of export-import operations and the volume of official reserve assets, which determine the level of the exchange rate, have a decisive influence on the dynamics of the consumer price index, and it, in turn, determines the level of prices for imported goods and services. Neglecting the non-monetary factors of supply inflation during the implementation of the interest policy leads to the limitation of bank lending to non-financial corporations, which in turn reduces the ability of enterprises to increase capital investments at the expense of bank loans, as well as to develop domestic production with high added value and to implement the policy of import substitution. Therefore, for this purpose, it is necessary to use the asymmetric corridor of the central bank's interest policy and stimulate targeted bank lending to non-financial corporations.

Импортозамещение как фактор инновационного развития экономики России

Introduction. In the modern world, the introduction of innovations is becoming one of the main ways of economic development of both organizations and states. In this regard, the process of switching Russian economy to the innovative way of development acquires special importance. Still in 2011, the Government approved the Strategy for Innovative Development of Russia until 2020: it formulates the goals of the country’s long-term development and indicators that characterize their implementation. Import substitution was identified as one of the key factors contributing to the achievement of these goals. The aim of the work is to study the impact of import substitution on the effectiveness of the implementation of the Strategy for Innovative Development of Russia. Theoretical analysis. Import substitution processes in Russian economy began in the late 1990s. The main reason at that time was the ruble devaluation, due to which the volume of imports in 1998–1999 decreased by more than 30%. Imports replacement became possible by increasing the supply of domestic producers who resumed the use of previously mothballed facilities. According to a number of Russian economists, during this period import substitution was one of the key drivers of GDP and industrial production growth in the country. In the 2000s, import substitution processes began to take on a point-by-point rather than a mass factor: they took place in those industries where Russian enterprises had clear competitive advantages. In 2014, following the implementation of economic sanctions against Russia, the Government adopted a number of measures aimed at intensifying import substitution in the country. Empirical analysis. The text of the strategy identifies import substitution as one of the key factors in the innovative development of the domestic economy. The paper considers the impact of the ongoing policy of import substitution on the achievement of the strategic goals of Russia’s innovative development. A statistical analysis of indicators characterizing the effectiveness of ongoing measures in the field of import substitution and stimulation of innovative development was carried out. Results. According to the results of data statistical analysis, a conclusion is obtained that the target indicators in the field of import substitution have not been achieved: in key sectors of the economy there is still a high dependence on supplies of foreign products. Innovative technologies used by domestic organizations are still mainly of import origin. At the same time, indicators of innovation activity in Russia remain significantly lower than in foreign countries. This situation relates mainly to such factors as lack or shortage of organizations funds, long payback period of investments in innovation, lack of qualified personnel, as well as reduction of opportunities in cooperation with other enterprises and scientific organizations.

Тренды научно-технического развития Foodnet в России в условиях геополитической турбулентности

In modern conditions, defined by most domestic and foreign researchers as the ‘new normal”, new approaches are being formed to ensure the scientific and technological development of economies at the macro, meso and micro levels. The rapid transformation of the main trends in the geopolitical and economic situation in the country, the change in the emphasis of the import substitution policy in the sectors of the national economy, have led to the complication of the tasks facing the domestic economy related to the need to form a new system of priorities for national and regional innovation policy.
 The authors of the article carried out work to identify global challenges, risks and potential threats of the agricultural development until 2030, as well as to form the prerequisites for the scientific and technological development of the market for scientific and technological initiatives (NTI) Foodnet. To understand the development of the NTI Foodnet market, the authors conducted a study of the prerequisites and reasons for the increased interest of foreign and domestic researchers in this article. In the study, the authors identified the factors for the creation and forming of the Foodnet market in the face of increased economic sanctions, geopolitical turbulence, and the growing problem of food security. The authors of the article made the assumption that this concept will solve the problems of import substitution of the agricultural industry of the regions of the Russian Federation through the introduction of new technologies and new principles for organizing the interaction of participants in the Foodnet market, which is open to the integration of new high technologies, through the introduction of new solutions based on digitalization and customization of agricultural products.

Is the Russian Economy a Market Economy?

The purpose of the article is to assess whether Russia is a market economy according to the set of criteria. In the event that Russia loses the status of a country with a market economy, a statistical hypothesis was tested about a significant difference in the average values of national rates of US anti-dumping duties for market and non-market economies. The status of Russia is analyzed based on EBRD data for 2021–2022, the 2021 report of the WTO Secretariat on the trade policy of the Russian Federation. The claims expressed by the EU and the United States regarding government procurements and localization requirements at meetings of the WTO Committees on Trade in Goods and on Trade-Related Investment measures in 2020–2021 are considered. Anti-dumping duties were estimated based on the US notification of anti-dumping investigations for 10.01.2021–30.06.2021. Methods of mathematical statistics were used, as well as the IBM SPSS statistics system. According to the EBRD, Russia as a “sustainable market economy” is rated at an average of 5.9 points out of 10 possible. A lag in terms of integration was noted. The pricing policy does not cause complaints from the WTO members, however, the policy of government procurements, localization and import substitution of the Russian government does not meet the expectations of the WTO member countries. It was revealed that the exclusion of foreign manufacturers in the widely interpreted “government procurements” is the weakest element among those assessed. The specific obligations of the protocol on Russia’s accession to the WTO (paragraph 99 of the Report of the working group) “to make purchases, if they are not intended for state needs, guided by commercial considerations, without interfering with competition from enterprises of other WTO member countries for participation in such procurements” are violated. The impending loss of market status with the US could increase anti-dumping duties on Russian exports by 287 percentage points. The revealed upward trend in national rates of anti-dumping duties for countries with non-market economies allows us to conclude that the level of discrimination against countries with non-market economies is increasing. The hypothesis that the difference between the average values of the national rates of US anti-dumping duties for market and non-market economies is significant is confirmed.

The geopolitical reality of the sanction opposition in the context of the need to study the foreign retrospective of import substitution: The experience of Brazil and India

The presented collective work, in accordance with the international classification, is a review article, the purpose of which is to consider the foreign experience of import substitution policy in the context of economic sublimation of the prospects for Russia's opposition to the Anglo-Saxon world's attempts to inhibit high-tech development and the policy of reducing the share of Russia's hydrocarbon economy, as well as in the context of the activation of centrifugal processes of a destructive nature aimed at the institutional foundations of the integrity of the Russian statehood.

How does colonial heritage segment food markets? Evidence from rice consumers in Mauritania

Abstract Reducing Africa's dependence on Asian rice imports requires tailoring local rice products to food markets that are segmented by cultural heritage of ancient rice domestication and colonial heritage of more recent import substitution policies. Using experimental auctions, we examine quality upgrading and branding spillovers from Senegal by assessing the competitiveness of Senegalese vis-à-vis imported Asian rice products in an urban market in Mauritania. The Mauritanian rice market is mainly shaped by colonial heritage and is segmented into (i) elite White Hassanis, (ii) lower caste Black Hassanis, (iii) immigrants with colonial heritage, and (iv) a smaller group of immigrants with cultural heritage. While colonial heritage generally tends to incline consumers towards imported rice, local rice is preferred by Black Hassanis, older and more educated consumers, housewives, and wealthier families. This evidence can support policymakers and value chain actors in their efforts to spill over rice value chain upgrading between the Senegalese and Mauritanian river banks along the Senegal River Valley.

A Supply and Use Model for Estimating the Contribution of Costs to Energy Prices

This paper develops a supply and uses a model to estimate the direct and indirect contribution of costs to the formation of energy prices. The model is implemented into the Greek economy based on data from the supply and use tables. The findings of the analysis indicate that the main component of energy prices are profits, mainly distributed to the energy sector itself, and imports, which mostly concern Mining and quarrying products and Coke and refined petroleum products imported from non-EU countries. As far as the contribution of the energy sector to the price formation of the other industries of the Greek economy is concerned, it is found that the energy sector mainly contributes to the price formation of industrial sectors. The results imply that the containment of energy prices should be principally based on an income policy that would limit excessive profits within the energy sector and an import substitution policy towards the exploitation of domestic mining and quarrying products as well as coke and refined petroleum products.

STUDY OF THE METHODS OF DETERMİNİNG AND MANAGİNG THE ENTERPRİSE'S EXPORT CAPACİTY BASED ON İNTERNATİONAL BUSİNESS PRACTİCES

STUDY OF THE METHODS OF DETERMİNİNG AND MANAGİNG THE ENTERPRİSE'S EXPORT CAPACİTY BASED ON İNTERNATİONAL BUSİNESS PRACTİCES

Do as You Say, or I Will: Retail signal congruency in buy‐online‐pickup‐in‐store and negative word‐of‐mouth

AbstractBuy‐online‐pickup‐instore (BOPIS) services have become an increasingly important part of a retailer's omnichannel strategy. When service failures (e.g., stock‐out) occur, consumers may resort to negative word‐ofmouth (NWOM) to share their evaluation of the retailer's BOPIS service. While a retailer's service recovery policies (e.g., cross‐channel substitution) may help to fulfill its service intent, the extent to which these two signals can improve consumer satisfaction and diminish their NWOM intent remains unknown. Drawing from both service recovery literature and signaling theory, we conducted a series of five experiments and find that the intradimensional congruity of the signal set communicated by the retailer during its BOPIS service process depends on both its operational capability and the consumer's own predilection regarding the product category. These insights collectively indicate that while a retailer's operations need to support service policies to provide a congruous BOPIS service process, substitution policies offered to consumers during the transaction need to consider the extent to which a consumer's purchase decision is hedonic or utilitarian. In turn, this finding suggests that a retailer's category management needs to consider BOPIS substitution in terms of both product assortment and inventory policies.

The political economy of a North–South trade agreement and the development prospects for Mexico: from NAFTA to USMCA

ABSTRACT In the 1980s, Mexico switched from a policy of import substitution to export-oriented development. From 1994, it participated in a North–South free trade agreement with the United States and Canada (North American Free Trade Agreement – NAFTA). The agreement strongly reflected the asymmetric power of the three participants, although some Mexico’s regions served as production platforms in global value chains. Under NAFTA, Mexico’s overall growth was insipid, yet a trade surplus with the United States was the excuse for Donald Trump’s government to impose a renegotiation that led in 2020 to a new agreement (US, Mexico, Canada Agreement – USMCA) with terms yet more favourable to the United States. In the light of this experience and the political and economic factors that explain it, this paper studies to the need to get Mexico’s trade policies right through permanent consideration to the development needs in the country.

Import substitution in high-tech industries under external sanctions

In the context of restrictions on the import of technologies and equipment to the Russian Federation caused by external sanctions and the withdrawal of Western European, American and Japanese companies from our country, initially, high-tech branches of domestic industry found themselves in a difficult situation. There were problems related to the substitution of products that fell under the ban on import, and the development of localization of the main production segments. The purpose of the study is to review import substitution plans in the machine tool, aviation, electronic and machine-building industries in order to assess the effectiveness of their implementation; to identify the causes and factors of inhibition of the import substitution policy, as well as ways to improve its effectiveness. The author offers directions of improvement of the State support of high-tech branches of manufacturing industry to solve the problems facing it.

The substitution of short-haul flights with rail services in German air travel markets: A quantitative analysis

In recent years, a ban on short-haul flights for which alternative, more environmentally friendly transportation is available has been on European regulatory agendas, particularly in countries like Germany, with its well-developed high-speed rail (HSR) and a dense network of low-cost, point-to-point airline traffic. This study aims to quantify the potential impact on CO2 emissions of substituting short-haul flights with rail frequencies in 87 German air travel corridors. Using OAG data on passenger bookings and airline schedules for 2019, as well as current rail travel times, we determine the target flights by looking at the actual proportion of connecting passengers per frequency. We estimate a potential reduction in CO2 emissions of between 2.7% and 22%, depending on how strict the flight substitution is. However, the social benefits of those carbon emissions might fall short of the travel time losses experienced by the passengers. Increased investment to improve rail speeds and intermodal accessibility appears necessary before the substitution policies can be implemented.

The The Role of Industrial Policy in the BRIC Economies: A Case Study of India, Brazil and China

After the very heated debate on industrial policy from the late 1970’s to the mid-1980’s prompted by the success of the East Asian industrial policy practices, the debate collapsed into three decades of neglect. Unexpectedly, however, industrial policy is back on the economic policy agenda and starting to be conceived through a systematic approach that extends beyond market failures. This article contributes to the discussion as it attempts to navigate through the industrial policy debate whilst acknowledging its contribution to the development of emerging market economies, more specifically, India, China and Brazil of the BRIC. All of the BRIC economies, at some stage of their industrialisation have engaged with inward looking policies, more specifically, import substitution policies. This paper, whilst following a critical review format, studies these cases and seeks to identify the implications that the debate, modified in the light of its recent comeback, could have on them.

Aspects of import substitution in the mining and processing industry

There are at least two aspects to the import substitution policy in mining and processing and related industries. One is related to the forced restriction of international competition, the growing share of imperfect competition, costs in the form of lower overall product quality, higher prices, and potentially higher corruption. The other implies wider possibilities for domestic equipment and technology designers and suppliers, ensuring independence and stability in the basic sectors of the economy. The possible import substitution mechanisms include:— direct import substitution with products designed and manufactured domestically;— joint manufacture with high localization (70–80 %);— parallel import through alternative suppliers;— reorientation to alternative suppliers.According to expert assessments, rapid import substitution is deemed impossible only for a few critical groups of equipment, including high-power electric motors, ore mills of the largest standard sizes, and high-pressure grinding rolls. The supply of these machines for new or reconstructed processing plants seems highly problematic. As regards the above-mentioned mills, this type of equipment has a very long life cycle and mainly requires the supply of replacement parts. In general, Russian manufacturers are able to reliably cover the demand for all basic mineral processing equipment, with the exception of three or four types of custom high-performance solutions. In the field of laboratory equipment for mineral raw materials, domestic enterprises supply all types of equipment required by the industry.The study was carried out under the grant issued by the Russian Science Foundation (project No. 20-79-10125).

English

This research examines the impact of import substitution policy on the trade balance and exchange rate in Ghana by employing the macroeconomic variables – inflation rate and interest rate. For a robustness check, the policy is analyzed using the augmented trade balance and magnitude of import substitution approaches. The study utilizes quarterly data from 1990Q1 to 2021Q1 and applies the Johansen cointegration test and vector error correction model to estimate the dynamics of the policy impact. The results show that the import substitution policy boosts the capacity of domestic production and improves the trade balance. Also, the study reveals that both the augmented trade balance and magnitude of import substitution and international reserves have a symmetric negative impact on the exchange rate at a statistically significant level of 1%, ceteris paribus. This implies that the implementation of the import substitution policy would ensure the appreciation or stabilization of the domestic currency value in Ghana without depleting the international reserves in the long-run.   Key words: Exchange rate; trade balance; international reserves; inflation rate; interest rate; augmented trade balance; magnitude of import substitution.

A nationwide survey exploring physicians’ and pharmacists’ knowledge, awareness and perceptions regarding generic medicines in China

BackgroundGeneric medicines substitution is an important means to control rapid growth of pharmaceutical expenditures for the healthcare system in China. Acceptance and utilization of generic medicines is highly influenced by healthcare providers’ perceptions. This study aimed to compare the knowledge, awareness and perceptions of generic medicines between physicians and pharmacists in China.MethodsWe used an online, cross-sectional survey across China. The questionnaire explored four sections: demographic characteristics, assessment of the participants’ knowledge and awareness of generic medicines, perceptions of generic medicines and generic substitution practices. Chi-square or Mann–Whitney-U tests were applied to compare differences between physicians and pharmacists. P-values < 0.05 were considered significant.ResultsA total of 1644 physicians and 4187 pharmacists participated. Most physicians (82.8%, n = 1362) and pharmacists (89.8%, n = 3760) correctly identified the definition of generic medicines. A similar percentage of physicians and pharmacists agreed that approved generic medicines are as effective (64.1% vs 68.2%) or safe (63.8% vs 69.1%) as brand-name medicines. Most physicians and pharmacists (67.6% vs 71.0%) supported the policy of generic substitution. In practice, 79.4% (n = 1305) of physicians reported that they had prescribed generic medicines. More than 78% of respondents reported an obvious increase in the number of generic medicines prescribed in their medical institutions. The majority of physicians and pharmacists identified lack of trust regarding efficacy and safety of generic medicines and the difficulty of changing patients’ preference as top challenges in generic substitution.ConclusionsBoth physicians and pharmacists surveyed had adequate knowledge of generic medicines, and hold positive attitude towards generics and generic substitution. Efficacy and safety are key factors related to prescribing or dispensing generic medicines. Various policies and regulations should be taken to encourage successful generic substitution.

Prospects for Import Substitution and Balancing Ukraine’s External Trade

Abstract The development of world economic relations leads to the intensification of mutual exchange of goods between countries. In the article, we have analyzed the dynamics and structure of Ukraine’s external trade, assessed the degree of import dependence of the domestic market, and determined preconditions and national potential of import substitution of goods, including high-tech ones. We have determined public policy areas of import substitution in Ukraine, which include formation of the list of import-substituting goods, stimulation, export diversification, and the industrial and innovative development of the economy. The purpose of the article is to study the imbalances in Ukraine’s external trade in the context of the implementation of import substitution policy. The article analyzes the statistical and economic indicators, with a view to achieving the final research aims, in the period from 2010 to 2022 in Ukraine, in the service of military actions from 2014, and a full-scale invasion in January 2022, as well as conditions in the pandemic years (2019–21). Other countries are also considered concomitantly. We have drawn conclusions on the tendencies to increase the share of imports in the domestic market and proposed recommendations for the development of effective functioning of the internal market.

Peter I and the history of Russian metallurgy

This paper examines the history of Russian metallurgy during Peter&rsquo;s I reign. Thus, the authors analyze the works by pre-Revolution, Soviet and contemporary Russian and foreign historians and consider the main stages in the evolution of the industry in Russia in the 17th century through the 1st quarter of the 18th century. The authors distinguished and examined the key areas of metallurgical modernization implemented by Peter the Great. They include development of the old (traditional) metallurgical regions (the Central and the Olonetsk regions), establishment and rapid development of the new metallurgical region of the Urals, development of public-private partnership, establishment of public governance to oversee the metallurgical industry, the policy of import substitution and transition to iron exports, involvement of foreign specialists, training of qualified metallurgists among fellow countrymen, and expansion of the human resources pool for the industry. In the course of their research, the authors came to the conclusion that the Great Northern War had served as the driver for the rapid development of metallurgy. Peter&rsquo;s I reforms were based on the experience of the previous period in the country&rsquo;s history. However, they were of different quality: Russia did not only go through intense modernization in its aspiration to catch up with Western countries, but it succeeded so much as to become one of the leaders in Europe and a major influencer on the global arena. Peter&rsquo;s I timing in realizing the importance of metallurgy as a factor contributing to the modernization of the Russian army and building a powerful state was just right. The golden age of the Russian metallurgy, which came with Peter&rsquo;s the Great reforms, contributed to the success of the military reform, but it also helped the country win the Great Northern War turning it into a great world power.