Final “Beneficiaries” and Main Creditors of Loss-Making “Entrepreneurial” Activities
Authors:   Tomsk State University (Tomsk, Russian Federation), Sorokin Maxim A. , Grigorieva Mariia G. ,   Tomsk State University (Tomsk, Russian Federation), Oorzhak Sevilbaa D. ,   Tomsk State University (Tomsk, Russian Federation)
Published: December 2021

This article examines loss-making entrepreneurial activity, which is understood as the entrepreneurial activity of companies that have shown unprofitable results of their economic activities for several periods. The reasons for this can be different, such as using the company as cost centers in a group of companies; reflection of incomplete profits through transfer pricing, cost reduction (payment of taxes, fines), falsification of reporting data, etc. The main, final “beneficiaries” and “creditors” of companies’ activities are the state and foreign investors. They deal with the consequences of such activities that range from a decrease in tax revenues to a distortion of official statistics that serve as an important signal for economic policy. Consequently, there is a need to assess the performance of such unprofitable companies. The aim of the article is to develop methodological aspects of measuring the scale of shadow economic activity, identify problems in such a complex and multifaceted process, and propose ways to solve them. The calculation methodology is based on the analysis of the dynamics of the development of companies in Tomsk Oblast in the period from 1991 till 2021. The results of unprofitable “entrepreneurial” activities are assessed based on the analysis of the economic efficiency of 83,549 companies in Tomsk Oblast. The Index of Bad Faith is made to assess the size of the shadow economy as a percentage of GRP. It combines the factors of income from entrepreneurial activities (data on it is distorted), hired workers (unregistered or hidden from the authorities), and envelope wages. The share of the retained number of inactive companies for 10 years is found, minus the rate of natural decline in the number of companies in the total number of retained companies for 10 years from 1991 till 2001 and from 2001 till 2021. The average value obtained for these two periods is the size of the Index of Bad Faith equal to 39% and showing an upward trend. The index retains its structure and is working regardless of the organizational and legal form and industry of the enterprise, which is proved by the example of unitary enterprises and companies in the construction industry. The results of the study show that most of the existing methods are applicable to assess the state as a whole, and, due to the lack of indicators, they cannot be applied in assessing the shadow economy of the region. The proposed Index can be used to assess the shadow digital economy in the regions. Methods for minimizing such “unprofitable activities” were also proposed: creating an information accounting and analytical system, reducing the tax burden, systematizing the processes and accounting for the registration of companies in order to prevent the formation of new ones after admitting the reasons for unfair business conduct of the previous ones in terms of evasion in repaying debts to creditors, etc.