BRICS Journal of Economics No.3 (2021)

Sanctions, cooperation, and innovation: Insights into Russian economy and implications for Russian firms

Andrei Panibratov

The aim of this paper is to reveal the effects of sanctions at the firm level, with the special attention to cooperation and innovation activity of sanctioned firms. Specifically, the differences between domestic and international companies in their ability to adapt to the sanctions in terms of their cooperation with partners and capability to innovate are discussed. The study argues that firms operating in international markets tend to prioritize product innovation and entering new markets to overcome negative consequences of sanctions. In addition, they are more likely to improve their products and to find new markets to compensate for losses and fill their unused capacities. An important finding having both managerial and political value is that operating in the international market may not necessarily provide an advantage in terms of new partners in the local market but rather facilitate the search for new foreign markets. Inviting the government to provide assistance for Russian domestic and international firms on an equal basis, we admit that with varying degrees of control and interest in national firms, the Russian government can help sanctioned companies in different ways, regardless the scale of their internationalization. The study contributes to the literature on the impact of economic sanctions at the firm-level and in the context of the domestic market of the sanctioned country.

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Promotion of a healthy lifestyle in Russia and China The first results of COVID-19 and trends in the post-COVID economy

Elena Sharko

The COVID-19 pandemic has not only become a test for all mankind, but also gave reason to rethink the attitude to their health not only for people from the high-risk category, but also for everyone. Before the pandemic, the concept of a healthy lifestyle was gaining a powerful economic momentum (popularization of communities associated with fitness products, advertising, healthy products, etc.). But has the trend changed after the restrictions were eased? The purpose of this paper is to find out whether the healthy lifestyle concept affected the preservation of the health of the nation during the pandemic (is there a link between the level of national health and the degree of resistance to pandemics?). The study focuses on two countries — Russia and China. The difference in the population’s perception of the healthy lifestyle concept, promotion of a healthy lifestyle at the governmental level, and the assessment of its effectiveness are determined based on the analysis of secondary statistical data, a survey of 1,230 respondents from Russia and China in late 2020 — early 2021, as well as using econometric factor analysis. The results obtained can be scaled to the rest of the BRICS countries in order to adapt existing state programs to preserving the health of nations in the future.

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The development of e-commerce in China during the COVID-19 pandemic on the example of the textile industry

Deng Junzhi

The purpose of this paper is to analyze the current situation with e-commerce in China’s textile industry and new business models during the COVID-19 epidemic. The author studied the vital problems of the Chinese textile industry from the point of view of electronic commerce. In order to solve research problems, the method of qualitative content analysis was used to classify and summarize the research situation. Data sources include the latest academic papers, industry analytical reports of securities research institutions, reports of consulting companies (Boston Consulting Group, McKinsey & Company, etc.), as well as government and organization documents (ITMF, United Nations, etc.). Based on the research process, it can be concluded that during the COVID-19 period up to the middle of 2021, China’s textile industry experienced four stages, having switched from traditional e-commerce to interested e-commerce. Innovation and digital transformation seem to be necessary conditions for China’s textile industry to overcome the negative impact of the COVID-19 pandemic. Finally, the author puts forward a long-term development trends of the textile industry after the COVID-19 epidemic.

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Digital shifts in human resource management in the global economy

Amirreza Nikpour , Svetlana Semushkina

This article examines the key issues related to digital shifts in human resource management in the global economy. The purpose of the article is to identify the features and key trends in the introduction of digital technologies on the example of the BRICS countries. The study yielded a number of results. In the course of the research, the theoretical foundations of the digitalization of HR management are analyzed. The current situation and the contemporary level of human development in the BRICS countries is also noted. The features and problematic aspects of digital transformations in the human resource management system are outlined on the example of Russia, China and Brazil. In addition, the main digital technologies that are widely used in the countries under consideration are described.

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Determinants of underpricing initial public offerings (IPOs) of BRICS companies

Afik Gasymov, Svetlana Makarova

The purpose of this article is to identify the nature of the influence of crucial factors on the short-term underpricing of initial public offerings of common stocks of companies in the BRICS countries. Based on a sample of 1,141 companies from the BRICS countries that conducted IPOs (using Bloomberg and World Bank databases), we tested the influence of decisive factors on the underpricing of the shares of these companies. The empirical study is based on testing OLS models for different periods: for the period 2001–2018 and separately for the periods 2001–2008 and 2010–2018. The study shows that, firstly, with an increase in the volume of the placement of shares, their underestimation in an IPO decreases. In addition, having an auditor from the Big Four also reduces the underestimation of shares. Secondly, we revealed that the underpricing of shares in the course of the IPO increased with GDP growth. Besides, if companies place their shares on a foreign exchange, the underestimation of their shares increases. At the same time, such IPO parameters as the number of underwriters, the reputation of underwriters, and the deviation of the offer price from the middle of the price range during
the placement period do not affect the underestimation of shares for companies from the BRICS countries. Taking into account the results of an empirical study, the article formulates recommendations for improving the efficiency of initial public offerings for companies from the BRICS countries.

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