Citation: Mustafin, Askar Nailevich, Svetlana Nikolaevna Kotenkova, Ivana Kravˇ cáková Vozárová, and Rastislav Kotuliˇ c. 2022. Impact of Import Substitution Policy on Economic Growth. Economies 10: 324. https://doi.org/10.3390/ economies10120324 Academic Editor: Alexey Mikhaylov Received: 22 September 2022 Accepted: 6 December 2022 Published: 15 December 2022 Publisher’s Note: MDPI stays neutral with regard to jurisdictional claims in published maps and institutional affil- iations. Copyright: © 2022 by the authors. Licensee MDPI, Basel, Switzerland. This article is an open access article distributed under the terms and conditions of the Creative Commons Attribution (CC BY) license (https:// creativecommons.org/licenses/by/ 4.0/). economies Article Impact of Import Substitution Policy on Economic Growth Askar Nailevich Mustafin 1 , Svetlana Nikolaevna Kotenkova 1 , Ivana Kravˇ cáková Vozárová 2 and Rastislav Kotuliˇ c 2, * 1 Department of Economic Theory and Econometrics, Institute of Management, Economics and Finance, Kazan Federal University, Kazan 420008, Russia 2 Department of Economics and Economy, Faculty of Management and Business, University of Prešov, 080 01 Prešov, Slovakia * Correspondence: rastislav.kotulic@unipo.sk; Tel.: +421-51-4880-590 Abstract: This paper highlights the issues of import substitution in the context of attaining total macro- economic balance, market adaptation, and achieving new levels of regional economic development as a constituent part of the national economy of the Russian Federation. An effective strategy and goal management are the important forward-looking orientation points of the existence and development of the country. In this study, we tested the hypothesis that economic growth in the region can be estimated via the GRP per capita. To define the sectors and regions with a successful implementation of a substitution policy, our own special algorithm for sorting and classifying regions was used. This algorithm made it possible to estimate the effectiveness of the economic policy, if any. To confirm and estimate the hypothesis, tests based on panel data models were carried out. The results revealed that the economic policy of import substitution was 10% more efficient in the regions where it was implemented than those without an implemented policy. Keywords: import substitution; regions; economic growth; macro-economic balance; market adaptation 1. Introduction Governments in various countries, irrespective of the country’s level of economic growth, seek to initiate macroeconomic policies to achieve better economic performance to advance their level of business activities and, ultimately, ensure a better quality of life for the people. To achieve this, various approaches and interventions are applied in the process, but the outcomes are always different (Aregbeshola 2017). According to Baˇ cík et al. (2019), economic conditions and competitiveness are currently highly discussed issues that are necessary to confront within individual countries. In a period characterized by economic dynamics, economic growth, and the sustainability of economic development, most countries are concerned with the study of indicators that can help them to understand their economic situation. The industrial complex is a significant factor in the economy of any country. However, the low level of strategic management processes in industrial enterprises and the lack of on the part of the state to make modern strategic decisions for the rapid and efficient development of abandoned production facilities for the manufacturing of goods that are able to compete and to be in demand in the European market can lead some industrial enterprises to recession and bankruptcy (Vashchenko 2015). The value of Russian imports in USD declined between 2013 and 2021. It was not an indication of import substitution, but weak economic development and substantial ruble depreciation. Relative to GDP, Russian imports have remained relatively stable at around 20% throughout the past two decades both in terms of USD and constant rubles. The product structure of Russia’s foreign trade has changed little during past decades. Russia’s exports are dominated by energy commodities and other raw materials. Russian imports mainly consist of investment and consumer goods and components required for Economies 2022, 10, 324. https://doi.org/10.3390/economies10120324 https://www.mdpi.com/journal/economies