What drives Russian outward foreign direct investment? Some observations on the steel industry

In this article we look at the rise and fall of outward foreign direct investment (OFDI) by Russian steel companies - a big expansion abroad from the mid-2000s and a major retrenchment since the end of the decade. We try to determine what drove the expansion and what might be the implications of the retrenchment. We look at the commercial motivations that are the staples of the general OFDI literature but also, given the peculiar if not unique features of Russian business and state, we consider political explanations - whether business invests abroad in order to escape a predatory state or alternatively to serve the foreign policy objectives of the state. We also consider 'psychological' explanations, specifically the possible 'irrational' if not 'irresponsible exuberance' of hard-driving Russian oligarchs. It is expected that the discussion will allow some significant, albeit tentative, conclusions on Russian big business and its place in the global economy.The article is structured as follows: an outline of the key characteristics of the Russian steel industry; a presentation of the possible explanations for Russian steel OFDI; a summary of the OFDI activities of the six biggest Russian steel companies, with particular emphasis on three; an examination of the possible explanations in the light of their activities; and conclusions.