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Foreign direct investment and economic growth : empirical evidence from Russian regions

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  • Ledyaeva, Svetlana
  • Linden, Mikael

Abstract

Barro and Sala-I-Martin empirical framework of neoclassical Solow-Swan model is specified to determine the FDI impact on per capita growth in 74 Russian regions during period of 1996-2003.The Arellano-Bond GMM-DIFF methodology, developed for dynamic panel data models, is used in estimations.Results imply that in general FDI (or related investment components) do not contribute significantly to economic growth in Russia in the analyzed period. Regional growth in 1996-2003 is explained by the initial level of region's economic development, the 1998 financial crisis, domestic investments, and exports.However some evidence of positive aggregate FDI effects in higher-income regions is relevant.Another interesting result is that natural resource availability seems to be growth-inducing in rich regions, while in poor regions it is not significant.We also found convergence between poor and rich regions in Russia.However FDI seems not to play any significant role in the recent growth convergence process among Russian regions. Key words: Foreign Direct Investment (FDI), Russian regional economy, and economic growth JEL Classification: E22, F21, P27

Suggested Citation

  • Ledyaeva, Svetlana & Linden, Mikael, 2006. "Foreign direct investment and economic growth : empirical evidence from Russian regions," BOFIT Discussion Papers 17/2006, Bank of Finland, Institute for Economies in Transition.
  • Handle: RePEc:bof:bofitp:2006_017
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    1. repec:eur:ejesjr:85 is not listed on IDEAS
    2. Levoshko, Tamila, 2016. "Wie beeinflussen die politische Lage und FDI das Wirtschaftswachstum? Empirische Evidenz für die Ukraine und Polen," Working Papers 0615, University of Heidelberg, Department of Economics.
    3. 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).
    4. Oscar Bajo-Rubio & Carmen Diaz-Mora & Carmen Diaz-Roldan, 2010. "Foreign Direct Investment and Regional Growth: An Analysis of the Spanish Case," Regional Studies, Taylor & Francis Journals, vol. 44(3), pages 373-382.

    More about this item

    JEL classification:

    • E22 - Macroeconomics and Monetary Economics - - Consumption, Saving, Production, Employment, and Investment - - - Investment; Capital; Intangible Capital; Capacity
    • F21 - International Economics - - International Factor Movements and International Business - - - International Investment; Long-Term Capital Movements
    • P27 - Economic Systems - - Socialist Systems and Transition Economies - - - Performance and Prospects

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