Infrastructure in the Region: Long-Term Investments of Institutional Investors in Russia

  • Olga Vladimirovna BAKHAREVA Kazan State University of Architecture and Engineering Russian Federation, Republic Tatarstan
  • Anna Ilyinichna ROMANOVA Kazan State University of Architecture and Engineering Russian Federation, Republic Tatarstan
  • Roza Saimovna SAFINA Kazan State University of Architecture and Engineering Russian Federation, Republic Tatarstan
  • Irina Mikhaiilovna KURSINA Kazan State University of Architecture and Engineering Russian Federation, Republic Tatarstan
  • Tatiana Aleksandrovna SHINDINA South Ural State University (National Research University), Russian Federation

Abstract

The article deals with the possibility of long-term investment in infrastructure development in the region at the expense of internal resources of the pension market of institutional investors (Pension Fund of Russia, private pension funds Vnesheconombank and private management companies). We have analyzed various theoretical and empirical studies that have shown the dependence of the financial sector and its impact on economic growth; analysis of the institutional changes in the pension system in Russia; analysis of the impact of the financial crisis of 2014 – 2015 on the results of the investment of institutional investors in the pension market. We offer for the development of the region to use economic mechanism of redistribution of pension assets and their direction in the development of the regional economy. The methodology of long-term investment of pension assets of State funded part of the pension system in infrastructure projects of regional economy through closed real estate funds will solve the problem of obtaining a stable private pension funds, investment income above the level of inflation and maintain purchasing power of the pension capital of the financial market. In addition to the accepted measures of federal social politics we suggest to use regional state support of institutional investors (investing  of infrastructural projects of region due to creation of bank of regional earth and their contributing to the closed funds of the real estate).


The original typology of pension assets investment of institutional investors in infrastructure projects under the regional guarantee regional authorities (through standardized contractual pledge of land from the land bank in the region) would solve two pressing problems: the regional authorities will be able to access internal resources to long-term investments in their areas of the spatial development of the region and in infrastructure projects, and institutional investors will be able to ensure the growth of pension assets at the level of inflation in a closed real estate fund.


Structural policy of the government on the development of the region, the implementation of infrastructure projects will improve access to markets and services and public goods firms in urban agglomerations and rural settlements, will contribute to the performance of the regional economy and promote economic growth in the region.

References

[1] Acemoglu, D., Johnson, S., Robinson, J.A. and Thaicharoen, Y. 2003. Institutional causes, macroeconomic symptoms: Volatility, crises and growth. Journal of Monetary Economics, 50: 49-123.
[2] Ahuja, A., Yermo, J. and McTaggart, G. 2013. Developing a Funded Pension System in Russia. International Evidence and Recommendations. OECD publishing http://www.oecd.org/pensions/RussaFundedPensionSystem2013.pdf.
[3] Ajupov, A.A., Kurilova, A.A. and Ivanov, D.U. 2015. Hedging as an Important Component of the Financial Mechanism of Enterprise Management in the Automotive Cycles (Vol. 6: 45-49). Mediterranean Journal of Social Sciences. DOI: 10.5901/mjss.2015.v6n1s3p45.
[4] Antolin, P., Pugh, C. and Stewart, F. 2008. Forms of Benefit Payment at Retirement, OECD Working Papers on Insurance and Private Pensions, No. 26, OECD publishing, Paris.
[5] Arcand, J.-L., Berkes, E. and Panizza, U. 2013. Finance and Economic Development in a Model with Credit Rationing in The Social Value of the Financial Sector. Too Big to Fail or Just Too Big?, World Scientific, 67-80, http://www.worldscientific.com/worldscibooks/10.1142/8865.
[6] Assanova, M.A. 2015. Public Policy & Model of Sustainable Development in the Republic of Kazakhstan. Asian Social Science, Vol 11, 6: 237-244. DOI: 10,5539 / ass.v11n6p237.
[7] Bagehot, W. 1873. Lombard Street: A Description of the Money Market, History of Economic Thought Books, McMaster University Archive for the History of Economic Thought. http://socserv.mcmaster.ca/econ/ugcm/3ll3/bagehot/lombard.html.
[8] Bakhareva, O. V. 2014. Involvement of the assets of pension funds in regional projects: infrastructure projects and management of investment risks. Russian Entrepreneurship. Publisying House Creative Economy, No 23: 208-213.
[9] Bakri, A.K., Wong, S.L., Zulkefly, A.K. and Jais, M. 2012. The Impact of Subprime Mortgage Crisis on Islamic Banking and Islamic Stock Market. Procedia. Social and Behavioral Sciences, Vol 65, 3: 668-673
[10] Barro, R.J. 1997. The Determinants of Economic Growth: A Cross-Country Empirical Study. MIT Press, Cambridge.
[11] Beck, T., Levine, R. and Loayza, N. 2000, Finance and the sources of growth, Journal of Financial Economics, No 58(1-2): 261–300.
[12] Della Croce, R. 2012. Trends in Large Pension Fund Investment in Infrastructure, OECD Working Papers on Finance, Insurance and Private Pensions, No. 29, OECD Publishing, Paris.
[13] Gennaioli, N., Shleifer, A. and Vishny, R.W. 2010. Neglected Risks, Financial Innovation, and Financial Fragility, NBER Working Papers No 16068.
[14] Goldsmith, R. W. 1969. Financial Structure and Development, Yale University Press, New Haven.
[15] Golovtchenko, A. V. 2012. Private Pension Funds in Russia: Current State and Urgent Issue. Russian Entrepreneurship. Publisying House Creative Economy. No 12: 17-24.
[16] Guillaumont Jeanneney, S. 1998. Monnaie et finances, Presses Universitaires de France, Paris.
[17] Khasanov, I. Sh. 2014. Three-Sector Structure of the National Economy of Russia. Asian Social Science 10(20): 217 – 225. DOI: 10.5539/ass.v10n20p217.
[18] Kindleberger, C. P. 1978. Manias, Panics, and Crashes: A History of Financial Crises, Basic Books, New York.
[19] King, R. G. and Levine, R. 1993. Finance and growth: Schumpeter might be right, The Quarterly Journal of Economics 108(3): 717 – 37.
[20] Krivtsov, A.I. and Kalimullin, D.M. (2015). The Model of Changes Management Information System Construction. Review of European Studies 7(2): 10 – 14. DOI: 10.5539/res.v7n2p10.
[21] Levine, R. and Zervos, S. 1998. Stock markets, banks, and economic growth, The American Economic Review 88(3): 537–58.
[22] Minsky, H. P. 1974. ‘The modeling of financial instability: An introduction, in Modelling and Simulation’, Vol. 5, Proceedings of the Fifth Annual Pittsburgh Conference, Instruments Society of America, 267–72.
[23] Rajan, R. G. 2005. ‘Has financial development made the world riskier?’ Proceedings of the 2005 Jackson Hole Conference organized by the Kansas City Fed.
[24] Rajan, R. G. and Zingales, L. 1998. Financial dependence and growth, American Economic Review 88(3): 559–86.
[25] Roik, V. D. 2009. The formation of a modern institution of compulsory pension insurance. Russian Economic Journal 1-2: 26 – 33.
[26] Romanova, A.I., Lantsov, V.M. and Afanasyeva, A.N. 2013. National security: availability of housing rights from the perspective of citizens of Russia to motherhood and childhood. Publisying House Finance and Credit, No 42: 63-68
[27] Sadyrtdinov, R. R., Korablev, M. M. and Vladimirova, S. A. 2015. Regional Innovation System Development: Comparative Analysis of the Republic of Tatarstan and Volga Federal District Regions. Mediterranean Journal of Social Sciences (6)1: 317 – 321. DOI: 10,5901/mjss.2015.v6n1s3p317
[28] Schumpeter, J. A. 1911. A Theory of Economic Development, Harvard University Press.
[29] Shaw, E. 1973. Financial deepening in economic development, Oxford University Press, New York
[30] Tchetyrkin, E. M. 2000. Actuarial calculations in the private health insurance. Publisying House Delo, Moskow.
[31] Tirole, J. 2000. The Institutional Infrastructure of Competition Policy, Gouvernance, équité et marches mondiaux. Sélection des Actes Conference ABCDE – Europe Paris, 21-23 juin 1999. Revue d’économie du developpement 1-2: 123 – 132.
[32] Yashin, N.S., Andreeva, T.A., Serebrjakov, A.V. and Bagautdinova, N.G. 2015. Implementation of the Strategy: Problems and Solutions. Mediterranean Journal of Social Sciences 6(1): 475 – 481. DOI: 10.5901/mjss.2015.v6n1s3p475.
[33] Yermo, J. 2012. The Role of Funded Pensions in Retirement Income Systems: Issues for the Russian Federation, OECD Working Papers on Finance, Insurance and Private Pensions, No. 27, OECD Publishing, Paris.
[34] Zagidullina, G.M., Romanova, A.I. et al. 2013. Indicative Model of Socio-Economic Development of Small Towns. World Applied Sciences Journal 24: 350 – 357. DOI: 10.5829/idosi.wasj.2013.24.03.13203.
[35] Zagidullina, G.M., Romanova, A.I. et al. 2013. Peculiarities of Housing Construction Development in the Region. Middle-East Journal of Scientific Research 16: 490 – 495.
Published
2017-04-01
How to Cite
BAKHAREVA, Olga Vladimirovna et al. Infrastructure in the Region: Long-Term Investments of Institutional Investors in Russia. Journal of Advanced Research in Law and Economics, [S.l.], v. 6, n. 3, p. 488-503, apr. 2017. ISSN 2068-696X. Available at: <https://journals.aserspublishing.eu/jarle/article/view/916>. Date accessed: 22 apr. 2024.