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The regional distribution of foreign investment in Russia

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  • Ksenia Gonchar
  • Philipp Marek

Abstract

type="main" xml:id="ecot12047-abs-0001"> This article conducts a plant-level study of the factors affecting foreign direct investment (FDI) inflow to a large opening economy endowed with specific factor advantages. We conclude that the distribution of FDI in Russian regions depends on market access and can be most notably described by the knowledge-capital framework. Factor endowments built by natural resources are more successful in explaining the location decisions of export–platform affiliates. The impact of natural resources depends on how the availability of these resources is measured. The results reject the crowding out effects of resource FDI and prove co-location mode, when service investments are attracted to resource-rich regions. Labour cost advantages better explain the preferences of non-trading service affiliates.

Suggested Citation

  • Ksenia Gonchar & Philipp Marek, 2014. "The regional distribution of foreign investment in Russia," The Economics of Transition, The European Bank for Reconstruction and Development, vol. 22(4), pages 605-634, October.
    • Handle: RePEc:bla:etrans:v:22:y:2014:i:4:p:605-634
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    File URL: http://hdl.handle.net/10.1111/ecot.2014.22.issue-4
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    Citations

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    Cited by:

    1. Riccardo Crescenzi & Alexander Jaax, 2017. "Innovation in Russia: The Territorial Dimension," Economic Geography, Taylor & Francis Journals, vol. 93(1), pages 66-88, January.
    2. Wencong Lu & Ikboljon Kasimov & Ibrokhim Karimov & Yakhyobek Abdullaev, 2020. "Foreign Direct Investment, Natural Resources, Economic Freedom, and Sea-Access: Evidence from the Commonwealth of Independent States," Sustainability, MDPI, vol. 12(8), pages 1-18, April.
    3. Gurshev Oleg, 2019. "What determines foreign direct investment in Russia?," Central European Economic Journal, Sciendo, vol. 53(6), pages 311-322, January.
    4. Obeng, Camara Kwasi, 2016. "Can location incentives deliver jobs to the less endowed regions of Ghana?," MPRA Paper 70132, University Library of Munich, Germany.
    5. Mariev Oleg Svyatoslavovich & Drapkin Igor Mikhailovich & Chukavina Kristina Vladimirovna & Rachinger Heiko, 2016. "Determinants of FDI inflows: the case of Russian regions," Экономика региона, CyberLeninka;Федеральное государственное бюджетное учреждение науки «Институт экономики Уральского отделения Российской академии наук», vol. 12(4), pages 1244-1252.
    6. Andrzej Cieślik & Oleg Gurshev, 2023. "Factor Endowments, Economic Integration, Sanctions, and Offshores: Evidence from Inward FDI in Russia," Comparative Economic Studies, Palgrave Macmillan;Association for Comparative Economic Studies, vol. 65(4), pages 617-649, December.
    7. Deseatnicov, Ivan & Klochko, Olga, 2023. "Currency risk and the dynamics of German investors entry and exit in Russia," Emerging Markets Review, Elsevier, vol. 55(C).
    8. Irandoust, Manuchehr, 2022. "FDI and Natural Resource Rents: Evidence from Eight Post-Communist Countries," Journal of Economic Development, The Economic Research Institute, Chung-Ang University, vol. 47(2), pages 67-79, June.
    9. Natalia Davidson & Oleg Mariev, 2019. "Factors determining enterprise location choice in Russia," Proceedings of Economics and Finance Conferences 8911539, International Institute of Social and Economic Sciences.
    10. Obeng, Camara Kwasi, 2016. "Effect of location incentives on regional distribution of foreign direct investment in Ghana," MPRA Paper 70131, University Library of Munich, Germany.
    11. Veronika Hecht, 2017. "Location choice of German multinationals in the Czech Republic," The Economics of Transition, The European Bank for Reconstruction and Development, vol. 25(4), pages 593-623, October.

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