International Business Management

Year: 2015
Volume: 9
Issue: 5
Page No. 917 - 927

Renovation of Capital Structures of Economic Entities under Conditions of Reindustrialisation of Russian Economy

Authors : Gulnaz Z. Akhmetova and Venera I. Vagizova

Abstract: Structural changes in the global and domestic economies both affect qualitative aspects of economic systems transformation and make actual the problems of renewal of traditional conditions of use and renovation of capital as a principal factor of production. Strengthening of the role of sectors with added value, change of quality of labor productivity, growing importance of the role of institutes in the local economic systems development, overriding of sectoral disproportions, inter-regional interaction of economic entities, investments shortfall and limited possibilities of capital to ensure economic growth are an actual tendency of a present-day economic development. The major economic indicators of Russia for the period from 2008-2014 evidence inadequate structure of economy and necessity to develop theoretical and practical conditions for renovation of capital of economic entities in the context of unbalanced environment. The capital growth of which is gained through investments is the main driver of economic development. Under the crisis conditions of the domestic economy development investments in fixed capital had negative value in 2013-2014. Limited proprietary funds of economic entities, high interests on commercial credits, progressive obsolescence of fixed-capital assets still act as the basic reasons restraining the process of capital renovation. Non-renewed fixed-capital assets require additional capital for their maintenance, current and overhaul repairs and cause low labor capacity. Therefore, the capital of an economic entity is “confined” to serve for covering increased costs connected with maintenance of the obsolete assets, electric power, raw and other materials which results in manufacture of low-quality products and does no allow for renovation and manufacture of new products.

How to cite this article:

Gulnaz Z. Akhmetova and Venera I. Vagizova, 2015. Renovation of Capital Structures of Economic Entities under Conditions of Reindustrialisation of Russian Economy. International Business Management, 9: 917-927.

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