INSTITUTIONAL BARRIERS TO SPATIAL AND ECONOMIC INTEGRATION OF SMALL AND MEDIUM-SIZED BUSINESSES IN THE DONETSK PEOPLE'S REPUBLIC

Abstract

The article provides a comprehensive analysis of institutional barriers hindering the spatial-economic integration of small and medium-sized enterprises (SMEs) in the Donetsk People's Republic under conditions of post-conflict recovery and integration with the economy of the Russian Federation. The methodological framework comprises systemic and comparative legal analysis, statistical methods, and expert assessments. The study diagnoses the current state of the DPR SME sector, characterized by a predominance of micro-enterprises and a recovery-oriented focus, which impedes its effective integration. A set of specific integration barriers has been identified and systematized: legal uncertainty arising from legislative adaptation, high administrative and corruption risks, a critical shortage of qualified personnel, limited access to financing, and destroyed infrastructure. These factors constrain the integration potential of entrepreneurship, perpetuate the region's economic isolation, and increase social tension. As a solution, the authors propose an original three-stage conceptual model for spatial-economic integration. The first stage includes urgent measures: a moratorium on inspections for new integration projects, a tax amnesty, and the launch of micro-lending programs to stimulate interregional cooperation. The second stage is aimed at establishing stable rules for integration processes through a "regulatory guillotine," the creation of a guarantee fund to support joint projects, and the opening of "My Business" centers with a focus on integration services. The third stage focuses on sustainable integration by stimulating exports to Russian regions, creating cross-border clusters, and developing human resources for operation within a unified economic space. The spatial-economic integration of SMEs is presented in the work as a fundamental task upon which the pace of the region's full-scale rapprochement, its social stability, and long-term economic viability depend. The article holds practical value for the public administration bodies of the DPR and the Russian Federation in formulating support programs for the integration processes of entrepreneurship in territories with a complex international legal status.