Structural shifts occurring in the global economy are changing the nature and mode of international expansion for multinational corporations (MNCs) and their participation in global production. However, scholars and researchers still have few tools to analyze such shifts, and studies of MNC behavior are often limited by data on foreign direct investment flows, which often do not reflect MNC participation in host countries. We use data from the AAMNE OECD database and demonstrate that using statistics on MNC output allows for a deeper understanding of the structural shifts in MNC participation in global production. The results confirm existing observations that the use of data on FDI flows is insufficient to provide a comprehensive assessment of MNCs’ participation in modern global production. The application of MNC output data also provides another perspective on the spread of global value chains and confirms the standard observation that the most active formation of global chains in the last two decades has been in the automotive and computer and electronics industries. The estimates obtained show that the absence of offshoring growth in the case of Chinese MNCs does not necessarily imply limited participation in foreign markets. Moreover, the expansion of offshoring production in developed countries (such as Germany, France, the United States) does not always lead to the spread of global value chains in manufacturing industries. In future research, it would be important to use data on MNC participation in the output of both home and host economies to analyze ongoing structural shifts and assess the effectiveness of industrial policy instruments.

The article examines contemporary priorities and instruments of industrial policy - defined as policies aimed at structural change in the economy - in the context of increasing geopolitical instability, technological competition, and the growing importance of structural transformation. An original index of the economic complexity of government financial support is proposed, based on the methodology of economic complexity, which allows for crosscountry com-parisons of the orientation of industrial support. An analysis of more than 6,500 unique regulatory acts from the GTA Corporate Subsidy Inventory shows that developed countries tend to support sectors with high technological complexity, while emerging market economies are more inclined to assist less complex but systemically important industries. It is also revealed that targeted SME support is often concentrated in traditional or simple sectors, serving functions related to social stability and inequality reduction. A positive correlation is found between a country's overall economic complexity and the complexity of its industrial policy portfolio. At the same time, it appears that the industrial support provided by developed countries is relatively simpler compared to the complexity level of their national economies, whereas the priorities of emerging market economies are more often aligned with relatively complex sectors within their domestic contexts. Thus, catching up economies aim to accelerate structural shifts toward technologically complex sectors, while developed economies can afford a more balanced approach to economic growth.

This study investigates the impact of pricing and export diversification on the resilience of Russian manufacturing firms within global value chains (GVCs) during two consecutive shocks: the COVID-19 pandemic and the sanctions of 2022. The research examines how pricing affects firms’ ability to sustain exports in times of crisis and analyzes the role of product and geographic diversification in mitigating disruptions. The findings reveal that market-controlled pricing and export diversification significantly enhance GVC resilience, enabling firms to adapt to disrupted supply chains and shifting market conditions. In contrast, rigid pricing controls, including government interventions, undermine export continuity. Single-product firms demonstrate less resilience to external shocks, highlighting the importance of export diversification in enhancing adaptability within GVCs. This study points out the critical role of flexibility and adaptability in pricing and export diversification for navigating external shocks. It provides useful insights for managers and policymakers, emphasizing the balance between resilience and efficiency in maintaining competitiveness. The results contribute to a broader understanding of GVC resilience, with implications for firms in other emerging economies facing similar challenges.

The urgent imperative for policymakers globally is the widespread adoption of industrial robots, yet a consensus on the critical factors driving this adoption remains elusive. This paper investigates the determinants of robotization in manufacturing, uniquely examining both conventional and artificial intelligence–based (AI-based) robots. We emphasize the role of foreign direct investments (FDIs) and the state as key stakeholders in the robotization process. Specifically, we assess state ownership, government financial and organizational support, and public procurement. Our database is derived from a survey of 1716 manufacturing firms in Russia, and our empirical analysis employs probit and multinomial logit techniques. For the first time in the empirical literature, we demonstrate that conventional and AI-based robotization are characteristic of different enterprises. We find that state-owned and foreign-owned firms are more likely to use conventional robots. In contrast, AI-based robotization is prevalent among firms receiving public orders and financial support, whereas organizational support is more common among firms with conventional robotization. Our findings have significant policy implications, highlighting the importance of FDI and the state’s role through various instruments—ownership participation, financial support, and demand provision via state procurement—in advancing robotization in countries lagging in this domain. A key limitation of our study is the focus on correlations rather than causal relationships, as well as the use of data from 2018, before the shocks of the pandemic and extensive sanctions, which may have altered the drivers of robotization. Nonetheless, our results broaden the understanding of robotization determinants across different economic contexts and underscore the differences in determinants for conventional versus AI-based robots.

While global demand for industrial policy-making continues to rise, increasing attention is being given to how these policies are shaped by participation in global value chains (GVCs), both in developed and developing countries. However, much of the research overlooks the regional dimension of support allocation, particularly the integration of regional economies into GVCs. This study aims to address this gap by examining the factors influencing state support at the regional level, with a focus on backward and forward linkages within GVCs in the manufacturing sector. The analysis is based on a survey of 1,900 Russian manufacturing firms conducted between August and November 2022, using data from 2019 to 2022 across various sectors and firm sizes. The findings show that Russian regional governments generally adopt conservative strategies when allocating financial support, focusing on a core group of companies crucial for maintaining regional economic stability. This support is primarily directed at exporters and firms fulfilling government contracts, with state-affiliated companies becoming the primary beneficiaries due to shifts in external conditions. Additionally, regions with greater integration into the global economy tend to adopt a more vertical policy approach, favoring large, GVC-integrated firms, while less integrated regions prioritize smaller firms, especially SMEs. Regions with stronger downstream linkages focus on supporting innovation-active firms to advance localization, import substitution, and technological independence goals. These findings highlight emerging priorities in Russia’s industrial policy, suggesting that regional initiatives are needed to strategically reposition the country’s regional economies in the global landscape amidst changing global dynamics.

Relevance. The global imperative for adopting a low-carbon economy resonates worldwide, yet comprehensive assessments specific to the Russian economy remain scant. This is especially important considering the significant differences in the level of transition to sustainable development among Russian regions. Research Objective. This study aims to introduce a robust methodology for evaluating and analyzing the international trade of low-carbon goods (LCGs) across various Russian regions and assessing its effects on fuel combustion emissions. Data and Methods. Data on LCGs trade were obtained from the Federal Customs Service of Russia. In conjunction, datasets from Rosstat and the Central Bank of Russia were incorporated for comprehensive econometric modeling. The analytical framework employed Tobit and quantile regressions. Results. The study uncovers significant disparities among Russian regions regarding the intensity of low-carbon goods exports and imports. This variation highlights the diverse competencies in LCGs production, as well as differing ecological agendas and consumption patterns across regions. Additionally, the research demonstrates that, although the widespread adoption of advanced production technologies is positively correlated with increased fuel combustion emissions, a U-shaped relationship exists where higher LCGs exports are associated with reductions in fuel combustion emissions across Russian regions to a certain degree. Conclusions. This research highlights important implications for both federal and regional industrial and environmental policies. It advocates for the development of targeted incentives that encourage the adoption of low-carbon goods (LCGs) and advanced technologies. By doing so, policymakers can effectively promote sustainable development tailored to the unique needs and conditions of various regions, thereby fostering ecological resilience and economic growth across diverse regional landscapes.

PurposeThis paper aims to discuss the firm productivity premium for servitized firms. It discusses servitization across the product value chain and estimates the effects of the range and extent of servitization on productivity premium in manufacturing firms.Design/methodology/approachThis paper develops a conceptual framework and tests the hypotheses on the effects of servitization on productivity premium using linear regression models with a sample of 20,837 Russian manufacturing firms gathered from the Ruslana Bureau van Dijk database and the Russian customs service.FindingsServitized firms exhibit higher total factor productivity and labor productivity. The labor productivity premium increases with the number of services offered. However, the impact of services on productivity varies along the product value chain: postmanufacturing and postsales services enhance productivity premium, while manufacturing and back-office services diminish them. The effect of establishment services remains ambiguous.Practical implicationsThis paper offers an analytical framework for firms to assess their servitization strategies. These strategies should be gradual, focused on enhancing firm efficiency rather than being an end goal. Firms should initiate the process by introducing services at the postproduction and postsales stages of the product creation chain to achieve productivity premium.Originality/valueThe paper extends the evidence on firm-level productivity drivers and contributes to the servitization theory. A servitization strategy should be portfolio-based, considering both the potential gains and losses in productivity resulting from the implementation of specific services.

The article examines various effects of sanction restrictions on target countries. To achieve this, the results of over 50 academic studies from the past decade regarding the impact of sanctions on different countries are analyzed and structured. This analysis is based on the study of sanction episodes predominantly from the 1980s to 2015. It is noted that sanctions have been extensively employed in the past decade, attributed to the intensification of international competition and increased conflict in global development. It is shown that the effects of sanctions exhibit strong ambiguity, temporal variability, and multidirectionality. Both negative and certain stimulating changes in sanction effects are identified and systematized in the contexts of international trade and foreign direct investment. It is demonstrated that sanctions sometimes act as triggers for structural changes in sub-sanctioned economies, altering their integration into global production. The increasing involvement of various countries in sanction confrontations significantly alters the conditions for national economic policies, oriented towards structural changes and long-term perspectives, primarily for industrial policies. For many countries, the task of formulating industrial policy in line with the logic of restructuring global value chains and their participation becomes relevant. This task is characteristic not only for countries targeted by sanctions but also for sanction-sending countries, for which the reverse sanction effects are even less predictable.

This study explores the relationships among Industry 4.0 technologies, their application areas, and the involvement of Russian manufacturing firms in global and domestic value chains. We apply logit and multinomial logit regressions using an original survey dataset of approximately 1,700 Russian manufacturing firms. We make a novel contribution to the literature by uncovering an asymmetry in adopting Industry 4.0 technologies among Russian industrial firms in domestic value chains (DVCs) and global value chains (GVCs). This asymmetry has the potential to impede GVC localization and DVC internationalization. Based on our results, software automation solutions are the only ones demonstrating statistical significance for firms participating simultaneously in GVCs, DVCs, and both GVCs and DVCs. Companies in DVCs demonstrate a broader utilization of Industry 4.0 technologies across various application areas. We also identify evidence of reshoring in DVCs, indicating that Industry 4.0 adoption encourages firms to establish enduring relationships with domestic suppliers. Highlighting that differences in technology adoption are influenced by external factors, including adherence to international standards and regulatory principles, we propose policy implications for developing countries. Recommendations encompass reducing entry barriers to DVCs, improving procurement transparency, and promoting competition in the digital solutions market to empower firms for seamless GVC integration.

The impact of foreign trade on the Russian economy’s growth remains debatable. In 2014, the economy faced initial sanctions, leading to export restructuring and affecting growth. In 2022, a second unprecedented wave of sanctions necessitated export restructuring and intensified the challenge of sourcing economic growth. This study evaluates the impact of intensive and extensive export margins on Russian regions’ growth from 2015 to 2021 and discusses post-2022 implications. It is hypothesised that new export goods and markets are vital for economic growth in Russian regions. The study shows that both intensive and extensive margins are positively related to the level of development in Russian regions, and developed regions with diversified economic structures had higher values of export margins. The methodology uses panel regression with random and fixed effects. The empirical results show Russian regions’ market share in the products they export and in the countries where they export (i. e. intensive product and geographic margin) is important for the economic growth of Russian regions, while the results for extensive margin are ambiguous. The obtained findings have implications for industrial policy, which should prioritise the development of measures aimed at supporting existing exporting companies in expanding their presence in familiar markets. The task of export diversification should primarily be addressed through working with existing exporters and export products, while the export of innovative products should be viewed as a gradual evolutionary process within the framework of long-term planning.

This study examines how internal research and development (R&D), external knowledge acquisition, and R&D contracted with other companies interact in local and foreign-owned enterprises in post-communist economies. A large sample of firm-level data from the Business Environment and Enterprise Performance Survey (BEEPS) across 26 post-communist countries (including European Union (EU) members and non-EU states of Eastern Europe, Caucasian countries, and Central Asian countries) and country-level data from the Global Innovation Index and the International Property Rights Index were used. The findings show that enterprises with majority foreign ownership are relatively more likely to acquire external R&D. We demonstrate that the R&D behavior of enterprises with majority foreign ownership and local firms are interrelated, that is, we find a synergy effect. According to the results, decisions on internal R&D and the purchase of external knowledge for enterprises with majority foreign ownership are similar to those of local firms. However, enterprises with foreign ownership contract R&D with other companies more often if local firms conduct internal R&D. These results indicate the presence of knowledge spillover and cross-learning effects in both types of enterprises in post-communist countries. Finally, we find that the national innovation environment is not significant for the R&D intensity of enterprises with majority foreign ownership, which suggests their high dependence on the parent structures of multinational enterprises.

The economic sanctions imposed by the United States, Europe, and other countries since 2014 have heightened the unpredictability and turbulence in the business environment for Russian firms, necessitating exploration of new international partners and transformation of economic relationships. This paper aims to examine the redirection of Russian outward foreign­ direct investment (OFDI) in the context of these economic sanctions, particularly those intensified since 2022. The analysis employs an estimated econometric model to compare actual and potential levels of OFDI, utilizing a comprehensive database covering 74 origin and 102 destination countries from 2010 to 2019. The estimation technique employs Poisson pseudo-maximum likelihood approaches. The findings indicate that Russian firms demonstrated underinvestment in most regions, except for Northern and Western Europe, during the examined period. The 2014 sanctions resulted in a significant decline in Russian OFDI to the countries imposing sanctions, while there was an increase in OFDI to Asia, the Middle East, and the CIS countries. As anticipated, the 2022 sanctions exerted additional pressure on Russian OFDI, leading to a further shift of their outflows towards Asia and the Middle East, which, however, could not compensate for the sharp decline in OFDI to the EU countries and North America. The results highlight the existence of untapped OFDI potential for Russia in African and Latin American countries as well as in the Middle East. These regions emerge as desirable partners for bilateral economic liberalization. From a policy perspective, the findings emphasize the importance for the Russian Federation to pursue deep trade agreements that encompass investment preferences, public procurement, and the protection of intellectual property rights with regions harboring untapped potential for OFDI. Additionally, expanding government support for domestic firms venturing abroad is crucial to sustain and enhance integration into the global economy, especially in the face of sanctions.

The article presents initial findings of a research project aimed at analyzing the impact of the “second wave” of sanctions in 2022 on the behavior of Russian companies, assesses their actions to adapt to the new conditions. This paper is based on survey data collected from managers of 1860 Russian manufacturing companies between August and November 2022. Despite the severity and scope of the sanctions, one third of the companies did not take adaptation measures, particularly local, technologically backward firms without innovative activity. On the whole, firms integrated into the global economy reacted more actively to new threats than those confined to the domestic market. We found significant variability in companies’ responses to the sanctions shock. Four basic quasistrategies of firms’ response are identified. The first one involved reducing current activities, employment, and investments. These actions were most common in industries integrated into global value chains, notably automotive industry and wood processing. The second strategy included simplifying products to reduce dependence on imports, finding new markets, and changing investment directions — typically seen in pharmaceutical firms. The third one consisted of altering supply channels for materials and components, and it was frequently adopted by manufacturers of rubber and plastic products. The fourth strategy focused on digitalization, developing new products, and increasing interaction with authorities. This was characteristic of industries whose markets have carved out niches due to the exits of major foreign players, in particular, manufacture of furniture. We highlight the following recommendations for the state anti-crisis policy: In 2022, the relative success of companies’ adaptation was associated with the implementation of “easy” import substitution. However, in the future there will be a need to prioritize support for the development of domestic technologies and increased access to knowledge. In conditions of high uncertainty, it is crucial to assist companies in building their own value chains, and predictability of government actions appears to be a significant factor in enhancing private initiative.

Despite clear progress in digitalization, Russia significantly lags behind global leaders in the use of digital technologies, including robots, artificial intelligence and 3D printing. In this study, we use the organizational characteristics of Russian industrial companies and the role of innovation diffusion channels to explain the digitalization factors of Russian industrial enterprises. The database is grounded on the results of a sample survey of 1.7 thousand companies; empirical estimates include the construction of logit regressions. The results of the study are mixed: digitized companies are focused on the domestic market, but are receptive to technology transfer from foreign investors, examples of other Russian and foreign companies in the industry, developments of research centers in the field of robotics and artificial intelligence. The study of the relationship between digitalization and firms' use of innovation channels has shown the importance of market incentives and flexible public innovation policy instruments. Direct government involvement as an owner in stimulating digitalization affects innovative companies using robots and 3D printing, while indirect government support measures are significant for innovative companies using artificial intelligence. This suggests that Russian companies overcome the barriers of resource constraints and organizational rigidity in different ways, and are also selectively susceptible to external incentives, which should be taken into account by the government in its policies.

The retail and wholesale sector has been hit hard by the coronavirus pandemic, leading to a major sector transformation. In this study, we analyse the factors of firm-level e-commerce adoption and expansion in response to the COVID-19 pandemic and pay special attention to the regional level determinants of e-commerce. We use the data provided by the EBRD-EIB-WB Enterprise Survey that includes about 18,000 observations for firms in Central and Eastern Europe (CEE) and Central Asia (CA) and approximately 1000 observations in Russia. We use the probit and weighted probit estimation techniques. Our central hypothesis states that while large cities are usually seen as drivers of the expansion of e-com-merce, lagging regions are catching up with the leading regions in the adoption of e-commerce. The study shows that firms in regions with lower levels of e-commerce before COVID-19 and firms in large cities were more likely to adopt e-commerce during the pandemic, which evidences a convergence in e-commerce between Russian regions. In contrast to the firms in CEE and CA countries, export market orientation and supply chain signals do not foster e-commerce adoption in Russia. This can be explained by weak development of subcontracting networks and low participation of small and medium-sized firms in cooperative relationships in Russia. Regarding policy implications, we argue that policy measures should focus on the distribution of low-cost solutions aiming to decrease entry barriers, liberalise domestic markets for entrance of foreign platforms in Russia, and support the development of domestic platforms.

Розничная и оптовая торговля серьезно пострадали от пандемии коронавируса, которая привела к значительной трансформации сектора. В настоящей статье исследуются факторы, влияющие на внедрение и расширение электронной коммерции на уровне компаний в ответ на вызовы пандемии COVID-19, при этом особое внимание уделяется региональным особенностям развития онлайн-торговли. Для этого проанализированы данные исследования EBRD-EIB-WB Enterprise Survey, которое включает около 18 000 наблюдений компаний Центральной и Восточной Европы (ЦВЕ) и Центральной Азии (ЦА), в том числе примерно 1000 наблюдений в России. Для проведения анализа были использованы такие методы оценки, как пробит-модель и взвешенная пробит-модель. Согласно гипотезе исследования, в то время как крупные города обычно рассматриваются как движущие силы развития электронной коммерции, отстающие регионы догоняют лидеров по внедрению электронной коммерции. Фирмы в регионах с более низким уровнем развития электронной коммерции (до распространения COVID-19), а также компании в крупных городах чаще делали выбор в пользу онлайн-торговли во время пандемии, что свидетельствует о конвергенции электронной коммерции между российскими регионами. В отличие от компаний в странах ЦВЕ и ЦА, такие факторы, как экспортная ориентация и изменения в цепочках поставок, не влияют на развитие электронной коммерции в России вследствие недостаточного развития субподрядных сетей и низкого уровня кооперации предприятий малого и среднего бизнеса. Что касается мер поддержки коммерческого сектора, необходима дальнейшая разработка доступных решений, направленных на снижение входных барьеров, либерализацию внутренних рынков для внедрения в России иностранных платформ и развитие отечественных торговых онлайн-площадок.

The study discusses the relationship between competition and innovation in low-tech and high-tech industries in transition economies. The analysis is based on the World Bank's Business Environment and Enterprise Performance Survey (BEEPS) for manufacturing industries in 32 countries and includes 8,686 observations. We find an inverted U-shaped relationship between competition and R&D expenditure for low-technology industries, and a positive monotonic relationship for hightechnology industries, similar to the left side of the inverted U-shaped curve. The latter result is in contrast to the previous results for developed economies, which also find an inverted U-shaped relationship between competition and innovation. We assume that our results reflect the "localization" of competition in high-tech sectors of transition economies, when increased competition in the domestic market of transition economies is not restrictive by nature and may foster innovation activity. From an economic policy perspective, it is important to discuss how to improve innovation performance in order to avoid mimicking positive changes in transition economies, especially those characterized by authoritarian policymaking. We focus on two main areas. First, it is necessary to improve the quality of corporate governance in state-owned companies that do not differ in R&D spending from private companies but have lower innovation performance; and second, it is necessary to attract foreign direct investment and create an enabling environment for foreign-owned companies that tend to have higher innovativeness-all other things being equal-and may foster national innovation ecosystems.

Advanced Manufacturing (AM) markets are a major factor of contemporary worldwide growth that to a large extent determines countries’ competitiveness. Strengthening and/or optimizing the positions on AM markets is among the major challenges for modern industrial policy. This article discusses the structure and dynamics of the development of advanced manufacturing markets, as well as the specifics of the policies of the countries strengthening their positions in these markets. Gaining entry into AM markets currently implies individual countries’ and industries’ adopting different models which combine a wide range of factors. Small nations are rapidly applying such approaches, gaining advantages and thus increasing their competitive edge, which creates certain challenges for leading high-tech countries too slow to adjust their industrial policies. So far the basis for Industry 4.0 markets is just emerging, and remains limited to a few nations including developing ones. Country cases are presented below to illustrate the development of AM markets. The authors conclude that in the current context, no universal approaches to shaping a successful industrial policy remain. The most productive strategy is to combine the unique advantages of a particular economy.

Foreign companies’ declining interest in the Russian economy in the 2010s was accompanied by rather cautious activities of foreign investors which had already entered the Russian market. Sluggishness of foreign companies’ activities in Russia can be substantiated not only by slowdown of economic growth rates, but also a lack of progress in liberalization of foreign direct investments regulation. To rekindle investment activities in the Russian economy again, it is necessary to revise investment policies, switch over to the single nondiscriminatory policy in respect of foreign and Russian investors and combine the policy aimed at underpinning mid-sized projects with the one aimed at supporting investments in strategically important sectors, including fast-growing industries and short-term cycle sectors.