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Regional Distribution of Foreign Direct Investment in Russia

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  • Ichiro Iwasaki
  • Keiko Suganuma

Abstract

The objective of this article is to develop a model of the regional distribution of foreign direct investment (FDI) in Russia based on panel data for 1996-2003 taking into consideration implications shown in preceding studies on the geography of FDI in Russia. Through descriptive statistical and econometric analysis, the following conclusions were reached. First, there is a notable deviation of FDI in Russia among regions; however, a clear geographical pattern, similar to that in Central and Eastern European countries and China, can not be observed. Second, resource endowments, market factors and social development factors, to which the preceding studies attach importance as determinants for the regional selection of FDI, also proved to have high significance and explanatory power in the empirical analysis. In addition, it has been suggested that climate and favourable regionally discriminatory FDI measures are possible investment factors. Third, evidence suggesting that the Russian financial crisis in 1998 had a statistically significant influence on the decision-making process of foreign investors was not found in this analysis.

Suggested Citation

  • Ichiro Iwasaki & Keiko Suganuma, 2005. "Regional Distribution of Foreign Direct Investment in Russia," Post-Communist Economies, Taylor & Francis Journals, vol. 17(2), pages 153-172.
  • Handle: RePEc:taf:pocoec:v:17:y:2005:i:2:p:153-172
    DOI: 10.1080/14631370500104828
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    1. Pietro Garibaldi & Nada Mora & Ratna Sahay & Jeromin Zettelmeyer, 2001. "What Moves Capital to Transition Economies?," IMF Staff Papers, Palgrave Macmillan, vol. 48(4), pages 1-6.
    2. Disdier, Anne-Celia & Mayer, Thierry, 2004. "How different is Eastern Europe? Structure and determinants of location choices by French firms in Eastern and Western Europe," Journal of Comparative Economics, Elsevier, vol. 32(2), pages 280-296, June.
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    1. repec:eee:rujoec:v:2:y:2016:i:2:p:162-191 is not listed on IDEAS
    2. Kayam, Saime Suna & Ecer, Sencer & Gupta, R, 2011. "Social determinants of intra-regional dispersion of FDI in India," MPRA Paper 39153, University Library of Munich, Germany.
    3. Iwasaki, Ichiro & Maurel, Mathilde & Meunier, Bogdan, 2016. "Firm entry and exit during a crisis period: Evidence from Russian regions," Russian Journal of Economics, Elsevier, vol. 2(2), pages 162-191.
    4. Ichiro Iwasaki, 2007. "Enterprise Reform And Corporate Governance In Russia: A Quantitative Survey," Journal of Economic Surveys, Wiley Blackwell, vol. 21(5), pages 849-902, December.
    5. Katiuscia Vaccarini, 2014. "Psychic distance and FDI: the case of China," Working Papers 1403, c.MET-05 - Centro Interuniversitario di Economia Applicata alle Politiche per L'industria, lo Sviluppo locale e l'Internazionalizzazione.
    6. Saime Kayam & Alexandr Yabrukov & Mehtap Hisarciklilar, 2013. "What Causes the Regional Disparity of FDI in Russia? A Spatial Analysis," Transition Studies Review, Springer;Central Eastern European University Network (CEEUN), vol. 20(1), pages 63-78, April.
    7. 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.
    8. Oleg Mariyev & Igor Drapkin & Kristina Chukavina & Heiko Rachinger, 2016. "Determinants Of Fdi Inflows: The Case Of Russian Regions," Economy of region, Centre for Economic Security, Institute of Economics of Ural Branch of Russian Academy of Sciences, vol. 1(4), pages 1244-1252.
    9. Gonchar, Ksenia & Marek, Philipp, 2013. "Natural-resource or Market-seeking FDI in Russia? An Empirical Study of Locational Factors Affecting the Regional Distribution of FDI Entries," IWH Discussion Papers 3/2013, Halle Institute for Economic Research (IWH).
    10. Svetlana Ledyaeva, 2009. "Spatial Econometric Analysis of Foreign Direct Investment Determinants in Russian Regions," The World Economy, Wiley Blackwell, vol. 32(4), pages 643-666, April.
    11. Riccardo Crescenzi & Alexander Jaax, 2015. "Innovation in Russia: the territorial dimension," Papers in Evolutionary Economic Geography (PEEG) 1509, Utrecht University, Department of Human Geography and Spatial Planning, Group Economic Geography, revised Apr 2015.
    12. Svetlana Ledyaeva & Päivi Karhunen & John Whalley, 2013. "Offshore jurisdictions (including Cyprus), corruption money laundering and Russian round-trip investment," NBER Working Papers 19019, National Bureau of Economic Research, Inc.
    13. Ichiro Iwasaki & Keiko Suganuma, 2015. "Foreign direct investment and regional economic development in Russia: an econometric assessment," Economic Change and Restructuring, Springer, vol. 48(3), pages 209-255, November.
    14. Simo Leppänen & Svetlana Ledyaeva & Riitta Kosonen, 2016. "Weather as a Competitive Factor between Local and Foreign Manufacturing Companies in Russia," Journal of Industry, Competition and Trade, Springer, vol. 16(4), pages 499-513, December.
    15. Svetlana Ledyaeva & Päivi Karhunen & John Whalley, 2013. "If Foreign Investment Is not Foreign: Round-Trip Versus Genuine Foreign Investment in Russia," Working Papers 2013-05, CEPII research center.
    16. Tullio Buccellato & Francesco Santangelo, 2009. "Foreign direct investments distribution in the Russian Federation: do spatial effects matter?," UCL SSEES Economics and Business working paper series 99, UCL School of Slavonic and East European Studies (SSEES).
    17. Svetlana Ledyaeva & Päivi Karhunen & Riitta Kosonen & John Whalley, 2015. "Offshore Foreign Direct Investment, Capital Round-Tripping, and Corruption: Empirical Analysis of Russian Regions," Economic Geography, Clark University, vol. 91(3), pages 305-341, July.
    18. Obeng, Camara Kwasi, 2016. "Can location incentives deliver jobs to the less endowed regions of Ghana?," MPRA Paper 70132, University Library of Munich, Germany.
    19. Ledyaeva, Svetlana & Karhunen, Päivi & Kosonen, Riitta, 2013. "Birds of a feather: Evidence on commonality of corruption and democracy in the origin and location of foreign investment in Russian regions," European Journal of Political Economy, Elsevier, vol. 32(C), pages 1-25.
    20. Päivi Karhunen & Riitta Kosonen & Svetlana Ledyaeva & Julia Wörz, 2014. "FDI in Russia from CESEE and Central Asia: A Micro-Level Perspective," Focus on European Economic Integration, Oesterreichische Nationalbank (Austrian Central Bank), issue 4, pages 54-70.

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