International Journal of Criminology and Sociology, 2020, 9, 2521-2526 2521
E-ISSN: 1929-4409/20 © 2020 Lifescience Global
Economic Growth and Stimulating Private Business Investment in
Infrastructure by Assessing Its Need
Tatiana Palei
*
, Elina Gurianova, Svetlana Mechtcheriakova and Marat Safiullin
Kazan Federal University, Kazan, Russian Federation
Abstract: Global statistics indicate increasing in private investors’ activity. Instead of the debate about the growing
infrastructure needs and adequacy of funding to meet, the more urgent is the search for more effective mechanisms to
attract investment in infrastructure assets. The chief objective of the study is to analyze the demand for infrastructure
services to ensure the activities of organizations forming the priority clusters in the region, made for orientation on the
existing industry need in the infrastructure support plans formation, concerning the construction financing of transport
and other Infrastructure on a parity basis for economic growth. It is determined that the quality of transport connections
play a vital role. It was established, that in all studied clusters, there is a tendency to increase transport services
demand. Given the results, the petrochemical cluster enterprisestrochemical cluster is ready to finance transport
infrastructure from the profits (perhaps on a matching base state) to remove the constraints of its industrial growth. For
marginal assessment of investments into the development of a transport complex efficiency, the regression model
"investments - profit" is received. It is suggested that with the growth of the industry, its profit is increasing at a rapid
pace, each additional ruble of investment brings higher returns.
Keywords: Infrastructure, demand, investment, industry, Economic Growth.
INTRODUCTION
Industrial Infrastructure is an essential element of
the economic system. The basic concept of public
infrastructure management is the advanced
(preventive) satisfaction of demand for infrastructure
services by economic actors and the population
(Topchy, 2018).
The methodology for the development and
modernization of industrial Infrastructure is reflected in
a large number of papers: Topchy, D.V. (2018),
Agénor, P.-R., and Alpaslan, B. (2018). The economic
growth dependence on production infrastructure is
considered in the writings of Aschauer, D.A. (1989),
Justman M (1995). All these studies prove that
Infrastructure is an effective factor in production.
The following papers are devoted to the
effectiveness of investment in infrastructure
assessment: Aigbokan B. E. (1999), Arrow and Kurz
(2013), and Kaban, et al. (2019). In this area of
research, the multicollinearity of final product output
and infrastructure capital requires attention. Since GDP
growth makes it possible to invest in Infrastructure, on
the other hand, infrastructure development provides
economic growth.
The attention to the impact of Infrastructure on
regional development has been paid in the writings of
Seethepalli, et al. (2008), Straub, et al. (2008), and
*Address correspondence to this author at the Kazan Federal University,
Kazan, Russian Federation; E-mail: ammarmahdi2020@gmail.com
Chizhevsky, et al. (2019). They highlighted the positive
effects of infrastructure investment in the regions, such
as increased labor migration, improved quality of life,
and facilitated access to markets.
An Interesting approach to assessing the
relationship between infrastructure dynamics and
industrial productivity and profitability was
demonstrated by Shah (1990), Gu & Macdonald
(2009). The same aspect, but with a focus on
assessing the impact of transport infrastructure on the
industrial sector in Germany, has been considered by
Stephan (1997). «Using time-series cross-section data
from the manufacturing sector of the 11 Bundesländer
from 1970 to 1993, he examined the impact of road
infrastructure on private production applying three
different approaches; i.e., a Cobb-Douglas production
function, a translog production function and a growth
accounting approach. He found that road infrastructure
is significant for production in the manufacturing sector.
Moreover, he found that variations between the
Bundesländer are more important for explaining the
Infrastructure's contribution to production than
variations across years» Stephan (1997). Boopen
(2006), Button (2012) estimated multiplier effects of
regional transportation infrastructure on regional
economies.
Demand forecasting errors and the ownership of
Infrastructure were discussed by Button, and Chen
(2014), and Enggartyasti, and Caraka, (2017).
Calabrese (2008) paid attention to strategic
communication for privatization, public-private
partnerships and private participation in infrastructure