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The impact of exchange rate dynamics on foreign direct investments inflow to the Russian Federation

Author

Listed:
  • Loshchenkova, A.

    (Russian Presidential Academy of National Economy and Public Administration, Moscow, Russia
    Gaidar Institute Moscow, Moscow, Russia)

  • Zaytsev, Yu.

    (Moscow State Institute of International Relations (MGIMO University), Moscow, Russia
    Russian Presidential Academy of National Economy and Public Administration, Moscow, Russia)

Abstract

The study reflects current issues of investment cooperation between the Russian Federation and foreign countries, the specificity of which has been particularly affected by Western economic sanctions and Russian anti-sanctions of the last four years. The economic crisis of the period 2014-2017 in the Russian Federation revealed a number of patterns related to changes in the exchange rate and the dynamics of incoming foreign direct investment (FDI) in Russia. In their study, based on macroeconomic modeling, the authors assess the impact of the level of the exchange rate on FDI inflows to the countries of the world and to the Russian Federation at the regional and sectoral levels. The results of the work made it possible to establish that strengthening the real ruble exchange rate increases the potential of the domestic market in the region, industry and the Russian Federation as a whole: there is an influx of FDI into the economy. The conducted study revealed the key areas of investment cooperation of the Russian Federation. Based on the studied experience and practice, the authors offer a number of recommendations for the Russian Federation on investment cooperation with foreign countries, taking into account the existing potential in various sectors and regions of the Russian Federation.

Suggested Citation

  • Loshchenkova, A. & Zaytsev, Yu., 2019. "The impact of exchange rate dynamics on foreign direct investments inflow to the Russian Federation," Journal of the New Economic Association, New Economic Association, vol. 44(4), pages 127-142.
    • Handle: RePEc:nea:journl:y:2019:i:44:p:127-142
    DOI: 10.31737/2221-2264-2019-44-4-4
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    References listed on IDEAS

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    1. Keith Head & Thierry Mayer & John Ries, 2002. "Revisiting Oligopolistic Reaction: Are Decisions on Foreign Direct Investment Strategic Complements?," Journal of Economics & Management Strategy, Wiley Blackwell, vol. 11(3), pages 453-472, September.
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    7. Head, K. & Mayer, T. & Ries, J., 2000. "Revisiting Oligopolistic Reaction : Are FDI Decisions Strategic Complements?," Papiers d'Economie Mathématique et Applications 2000.49, Université Panthéon-Sorbonne (Paris 1).
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    Cited by:

    1. Oscar Gasanov, 2021. "Five Years of Inflation Targeting Without Economic Growth: What Should Be Changed? The Case of Russia," International Journal of Financial Research, International Journal of Financial Research, Sciedu Press, vol. 12(3), pages 162-171, May.

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    More about this item

    Keywords

    foreign direct investments; exchange rate; Russian ruble; horizontal investments; vertical investments; Russian Federation;
    All these keywords.

    JEL classification:

    • F65 - International Economics - - Economic Impacts of Globalization - - - Finance
    • F41 - International Economics - - Macroeconomic Aspects of International Trade and Finance - - - Open Economy Macroeconomics

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