Influence of the Investment Coefficient on the International Competitiveness of Russian oil Refining Industry

The issue of technological and physical obsolescence of processing equipment at Russian oil refineries has been widely discussed by scholars due to the weakening global competitiveness and repeating attempts of the government to attract investments in the industry. One of the latest reforms which have caused fierce disputes in the scientific and expert community was the tax maneuver or so-called “investment coefficient”. This study aims at expanding the research on the tax maneuver assessing its influence over the international competitiveness of the Russian oil refining industry. In order to predict the influence of the "investment coefficient" over global competitiveness, we have determined the peculiarities of the Russian oil refining industry and calculated the economy of the business taking into account new taxation aspects. Then, using financial statements of refining companies and existing statistics about modernization projects we have built financial DCF models to asses the effectiveness of the “investment coefficient” and to analyze its influence over investment attractiveness and consequently global competitiveness.