Exploring the impact of ecological dimension on municipal investment: empirical evidence from Russia

Dina Krasnoselskaya; Venera Timiryanova; Dina Krasnoselskaya; Venera Timiryanova

doi:10.3934/NAR.2023014

National Accounting Review

2023, Volume 5, Issue 3: 227-244. doi: 10.3934/NAR.2023014

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Research article

Exploring the impact of ecological dimension on municipal investment: empirical evidence from Russia

Institute of Economics, Finance and Business, Ufa University of Science and Technology, ¾ st. Karl Marx, Ufa, 450076, Russian Federation

Received: 05 June 2023 Revised: 08 August 2023 Accepted: 22 August 2023 Published: 29 August 2023
JEL Codes: E22, Q56, C31

Investment has a crucial impact on the economic development of territories. Traditionally, scholars studied many factors influencing investment (cost of interest rate, labor productivity, GDP growth, financial firm's performance). At present, the existing body of literature demonstrates the shift of factors related to territorial investment attractiveness. Besides economic dimension, the ecological and social matters take key stages (the ESG concept and the triple bottom line concept). Our study is aimed at exploring the relationship between investment at municipal level and ecological factors, considering regional specifics and settlement patterns in Russia. We applied hierarchical (multilevel) modeling with spatial effects to accomplish a twofold goal: to estimate what share of investment variance attributed to municipal and regional scale; to distinguish between spatial error at regional level and influence of average investment in neighboring municipalities at municipal level. Our findings show that 32% total investment variance accounted for regional scale; investment is positively associated with population, production per capita and the ratio of circulating water and sequentially used water to used fresh water. The results of this paper could be useful in developing policy for attracting investment at regional and municipal levels. Given vast national territories, a variety of different regions and heterogeneous settlement patterns, our study lays an initial ground of assessing environmental impact on investment in Russia.
- investment,
- environmental protection,
- water,
- settlement schemes,
- spatial dependence,
- multilevel model
Citation: Dina Krasnoselskaya, Venera Timiryanova. Exploring the impact of ecological dimension on municipal investment: empirical evidence from Russia[J]. National Accounting Review, 2023, 5(3): 227-244. doi: 10.3934/NAR.2023014

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Abstract

Investment has a crucial impact on the economic development of territories. Traditionally, scholars studied many factors influencing investment (cost of interest rate, labor productivity, GDP growth, financial firm's performance). At present, the existing body of literature demonstrates the shift of factors related to territorial investment attractiveness. Besides economic dimension, the ecological and social matters take key stages (the ESG concept and the triple bottom line concept). Our study is aimed at exploring the relationship between investment at municipal level and ecological factors, considering regional specifics and settlement patterns in Russia. We applied hierarchical (multilevel) modeling with spatial effects to accomplish a twofold goal: to estimate what share of investment variance attributed to municipal and regional scale; to distinguish between spatial error at regional level and influence of average investment in neighboring municipalities at municipal level. Our findings show that 32% total investment variance accounted for regional scale; investment is positively associated with population, production per capita and the ratio of circulating water and sequentially used water to used fresh water. The results of this paper could be useful in developing policy for attracting investment at regional and municipal levels. Given vast national territories, a variety of different regions and heterogeneous settlement patterns, our study lays an initial ground of assessing environmental impact on investment in Russia.

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