Economic and Social Changes: Facts, Trends, Forecast (Jul 2019)
Localization of Foreign Production as a Tool to Develop the Export Base of the Russian Federation
Abstract
The relevance of our paper lies in the fact that in the conditions of the “new normality” of the world economy and amid international competition and protectionist measures, developed partner countries of Russia replace imports with localization of production. The main idea and goal of the paper is to substantiate the essence of the strategy of localization of foreign production for various stages of geo-economic development and the implications for the national economy. Its scientific novelty consists in the fact that it develops theoretical provisions that identify motives for the use of the strategy of foreign production localization by host economies at various stages of geo-economic development; the paper also classifies and assesses possible effects that a country obtains in the process of localization (on the example of Russia). We use the following research methods: analysis of localization experience of different groups of countries; synthesis of the experience of localization of foreign production in Russia in terms of using the institutional framework to promote localization and systematization of localization effects based on the analysis of the opinions of its participants and content analysis of press releases about their activities (companies included in the rating of major companies operating in Russia, and the list of special investment contracts); statistical analysis of the relative scale and some effects of localization; and analysis of the regulatory framework. The analysis has revealed that in the context of global challenges for foreign companies the localization of production in Russia, involving exports, becomes a way to preserve their positions in the Russian market. It provides the Russian economy with a number of positive effects, both quantitative (growth of investments, production and export volumes, tax revenues, and the number of jobs) and qualitative (inflow of technologies and specialists; import substitution, contribution to the revival of manufacturing; diversification of production and exports; training of local specialists, development of local production of components; improving the competitiveness of products produced in Russia and the image of Russian territories and participating companies). The results allow us to move toward the formation of a comprehensive vision in assessing the impact of the institutional factor on the foreign economic activity of territories
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