This article explores the economic attractiveness of Advanced Special Economic Zones (ASEZ) in the Russian Far East. In order to boost local economy by attracting investments, creation of new jobs, ASEZ are an essential mechanism in the regional development and international cooperation. In this article a DEA analysis was performed to quantitatively assess their economic attractiveness by measuring technical efficiency (TE) values. The results show that their average efficiency during the study period was valued at 0.639, indicating a space for the improvement of 36.1 %. Only Amurskaya ASEZ is considered to be totally efficient during the whole study period. This study also highlights two groups of ASEZ: efficient and inefficient. In general, it provides valuable insights for the federal and local governments, as well as for those interested in ASEZ development in the Russian Far East.
Keywords: Russian Far East, economic attractiveness, Advanced Special Economic Zones, effectiveness, data envelopment analysis.
At the end of 2014, Russian President Vladimir Putin signed the Federal Law on the Advanced Special Economic Zones (ASEZ) of the Russian Federation. The purpose of this law is to implement a special legal policy regarding commercial or other production and operational activities in the advanced development zone in accordance with current Russian legislation (tax legislation of the Russian Federation, basic laws of the Russian Federation, municipal regulations, etc.), provide tax incentives, improve the conditions for attracting investments and accelerate socio-economic development. The law establishes a preferential policy used by enterprises in ASEZ, a system of financial guarantees and supervision of infrastructure construction, as well as procedures for submitting applications for entry into the zones. Russia plans to create one or more ASEZ in the border areas of the constituent entities of the Federation, providing appropriate preferential conditions for operators, such as exemption of enterprises in the zones from property and land taxes, as well as the establishment of time limits for various tax benefits. The sources of financing for the construction of infrastructure in the advanced development zone are the federal budget, the local budget and extra-budgetary financial allocations [1].
In many ways, the active development of ASEZ was caused by the sanctions imposed against Russia in 2014 and justified by the subsequent policy of “turning to the East” in order to strengthen international trade with Southeast Asian countries, primarily with China. The second impulse, which emphasized the relevance of the ASEZ, has been identified since 2022, in strengthening cooperation between Russia and China in the Russian Far East [2].
Literature review
There are a lot of qualitative studies, that investigated economic attractiveness of ASEZ in the Russian Far East. Zhao Yin and Galina Gnatiuk [3] conducted a systematic analysis and a comprehensive assessment of the advantages in the development of ASEZ, which positively contribute to the development of the region. The disadvantages of development are considered and the constraining factors of the construction of hyper-development zones are studied. Konishchev and Netkachev [4] identify a set of problems and challenges related to the specifics of the activities of TOSER residents and their impact on the regional economy. The current regulatory framework and related mechanisms aimed at creating a favorable investment climate, as well as financial, social and demographic risks associated with the special economic status of ASEZ, are also considered. Stepanov [5] analyze the concept of territories of advanced socio-economic development and their role in the development of regions through the synergy of instruments for attracting private capital and mitigating the consequences of economic crises. Zhiltsov [6] proposes a practical method for classifying ASEZs in the Far East by level of development. Based on the results of the classification, 3 groups of ASEZs were identified according to the level of development, and a description of the main problems that hinder their further development was given. Katonin [7] observes the difficult macroeconomic situation in recent years, caused by the consequences of the economic slowdown during the COVID-19 epidemic, increasing sanctions barriers and devaluation of the national currency are increasing the imbalances in Russia’s regional development. Voronenko and Greyzik [2] considered the role of major infrastructure and energy projects, as well as territories of advanced socio-economic development in Russian-Chinese cross-border cooperation. The main aspects of the new Program for the Development of Russian-Chinese Cooperation in Trade, Economic and Investment fields in the Russian Far East for 2018–2024 are defined. Ruchev [8] discusses various financial and technological instruments that can be used to attract investments, provides an overview of modern methods and instruments such as government bonds, investment funds, venture funds, cryptocurrencies, and blockchain, and provides a comparative analysis of these instruments. The author also examines the problems related to implementing these instruments in regions with low levels of digitization and suggest solutions to overcome them. Afonin [9] evaluated the effectiveness criteria of ASEZ, such as the amount of private investment in terms of one ruble of public investment, the number of high-performance jobs created and the growth of the gross regional product.
Methodology
Obviously, that after 10 years since ASEZ creation, it is necessary to conduct their quantitative assessment, expressed in the effectiveness of the current policy to attract investment, new resident enterprises, as well as job creation within their framework. In our research, we propose data envelopment analysis (DEA) to study economic attractiveness of ASEZ in the Russian Far East. DEA is a method for measuring the relative efficiencies (technical efficiency (TE), in particular) of decision-making units (DMUs; ASEZ) that use multiple inputs to produce multiple outputs. If TE value is more than 1, the DMU is considered to be efficient, and vice versa. Therefore, it is possible to create the efficiency rating system of ASEZ in the Russian Far East by highlighting efficient and inefficient DMUs. In this study, we performed our calculations via DEAP 2.1 software including output-oriented CCR model of DEA, that assumes constant returns to scale (CRS) in which efficiency is measured relative to a possible increase in output indicators with unchanged input parameters. All the specifications of the model can be found in [10].
We used the open-sourced data, derived from Far East and Arctic Development Corporation and Rosstat for the first ten ASEZ from 2019 to 2022. This limitation in general, due to the data availability and its inconsistency. Input variable in our study represented by the amount of funds from all budgets aimed at financing the creation of engineering and transport infrastructure facilities of the ASEZ, (million rubles). Output variables are: 1) the number of resident-enterprises involved; 2) the number of actually created jobs; 3) and the volumes of attracted investments (billion rubles).
Results and discussion
As shown in Figure 1, TE of ASEZ had V-shaped trend for the entire study period. In general, the average technical efficiency value during the study period was 0.639, accounting for the gap of 36.1 % between the actual performance and the efficiency frontier. In 2021, presumably due to COVID-19 pandemic, this gap was the maximal (42.7 %), but in 2022 it returned to the level of 2019 (33.7 %). It can be seen that only Amurskaya ASEZ is considered to be totally efficient during the whole study period. Therefore, the remaining ASEZ are inefficient. Moreover, these ten selected ASEZ in the Russian Far East can be conditionally divided into two groups considering their performance. The first group consists of high-efficient DMUs with TE values of 0.639 and above, meaning their gap does not exceed 36.1 %. Therefore, except for the absolutely efficient Amurskaya ASEZ, there are also five DMUs, namely Primorye, Bolshoy Kamen, Khabarovsk, Kamchatka, and South Yakutia, with TE gaps of 25.8 %, 28.3 %, 13 %, 31.7 %, and 6.1 %, respectively. The second group includes the low-efficient ASEZ in terms of their economic attractiveness. Their gap in TE value is more than 36.1 %. The Mikhaylovsky, Yakutia, Gorny Vozduh, and Yuzhnaya ASEZ account for the gaps in TE value at 48.4 %, 66.2 %, 69.3 %, and 85.1 %, respectively.
Table 1
Technical efficiency (TE) values of ASEZ in 2019–2022
|
ASEZ |
2019 |
2020 |
2021 |
2022 |
Average |
|
Amurskaya |
1.000 |
1.000 |
1.000 |
1.000 |
1.000 |
|
Primorye |
0.794 |
1.000 |
0.482 |
0.794 |
0.742 |
|
Bolshoy Kamen |
1.000 |
0.527 |
0.502 |
1.000 |
0.717 |
|
Mikhaylovsky |
0.540 |
0.479 |
0.506 |
0.540 |
0.516 |
|
Khabarovsk |
1.000 |
1.000 |
0.574 |
1.000 |
0.870 |
|
Kamchatka |
0.526 |
0.787 |
1.000 |
0.526 |
0.683 |
|
Yakutia |
0.397 |
0.345 |
0.240 |
0.397 |
0.338 |
|
South Yakutia |
0.881 |
1.000 |
1.000 |
0.881 |
0.939 |
|
Gorny Vozduh |
0.336 |
0.335 |
0.234 |
0.336 |
0.307 |
|
Yuzhnaya |
0.115 |
0.146 |
0.189 |
0.155 |
0.149 |
|
Average |
0.663 |
0.662 |
0.573 |
0.663 |
0.639 |
Conclusions
In conclusion, ASEZ of the Russian Far East are important tool for attracting investments and accelerate socio-economic development in this region. This study employed a DEA analysis for ASEZ ranking and conducted their economic attractiveness through the technical efficiency values. The results show that their average efficiency during the study period was valued at 0.639, indicating a space for the improvement of 36.1 %. In general, Russian Far Eastern ASEZ performed a V-shaped trend: downward due to COVID-19 pandemic and upward trend in 2022. However, they did not reach the efficiency frontier. Amurskaya ASEZ is considered to be totally efficient during the whole study period, presumably, due to its geographical proximity to China and good allocation of financial resources that boosted its economic attractiveness. This study also highlights two groups of ASEZ: efficient and inefficient. All in all, federal and local governments should revise their budget allocation policy to accelerate socio-economic development and attract more investment in the framework of ASEZ.
References:
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