2018 Vol. 10 №1

The paper explores how the common economic space, a product of the EU, influenced the economies of the Baltic Sea Region states in 1995—2015. The authors investigate changes in the economic performance of the developed (Germany, Denmark, Finland, and Sweden) and Eastern European countries (Poland, Latvia, Lithuania, Estonia) during the integration of the latter states into the EU. Performance dynamics is analyzed for eight EU Baltic Sea Region countries. Three Russian Baltic regions constitute a control group. The authors conduct a production-function-based comparative analysis of development dynamics in individual countries to identify distinctive features for each group. Despite a rapid growth of Eastern European economies, the difference between the region’s eastern and western countries remains substantial. Economic convergence between eastern and western EU countries in terms of investment does not lead to convergence in labour efficiency. The capital-labour ratio and the growth rate of labour efficiency in the Russian Baltic are close to the Eastern European average.

This research is warranted, since the Northwestern Federal District accounts for a significant proportion of Russia’s exports. The study aims to reveal the connection between the federal district’s external and internal economic development and to identify the extent to which institutional support for international economic cooperation facilitates brisk international trade. The authors consider international trade from the perspective of its procedural and institutional components. The study stresses dependence between the total international trade and internal economic performance of Russia’s North-West. Another focus is an analysis of institutional support for the development factors and the levels and areas of international economic cooperation. The analysis shows that the Northwestern regions’ external and internal economic development is interdependent and there is considerable support for international cooperation at different levels and in different areas. To a degree, this is explained by the federal district’s geographical position and transport connections, the ‘Nordic’ character of the economy shared by the Russian and neighbouring territories, and the multi-tier nature of the institutional framework for international economic cooperation in the international region.

Saint Petersburg has a special mission in delivering national development priorities, ensuring sustainable economic growth, and commercializing R&D. This necessitates research on the situation in the corporate sector, including investment potential and propensity to invest. The authors estimate the readiness of Saint Petersburg public companies to employ investment tools in delivering development strategies, which determine to a large extent the competitiveness of the city’s economy. This article presents a study into the response of twenty local public companies to changes in the economy and their ability to stay efficient and preserve investment potential in volatile economic conditions. The measures taken by the companies are considered as inert and inefficient. The authors surveyed managers from 70 Russian non-public companies, who confirmed the hypothesis that businesses are interested in investing in the earning assets (securities) of other companies to receive interest (dividends). The respondents tend to associate the risk of such investments with the issuer’s corporate control and corporate governance, which often fall short of best practices. The authors conclude that there is a need to improve knowledge of corporate relations, which affect competitiveness and the raising of funds necessary for sustainable economic growth in Saint Petersburg.