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Factors determining enterprise location choice in Russia

Author

Listed:
  • Natalia Davidson

    () (Graduate School of Economics and Management, Ural Federal University)

  • Oleg Mariev

    () (Graduate School of Economics and Management, Ural Federal University)

Abstract

This paper studies determinants of enterprise location decisions in Russia, such as agglomeration levels, home market potential, transport infrastructure and institutional environment. Results confirm that agglomeration levels and home market potential affect foreign firms? location choice and probability that national firms will work in a city. Urbanization economies and home market potential positively affect location choice; localization economies have an inverted U shape. Estimation shows that foreign enterprises are interested in large demand. Under assumption that there are more innovations in diversified cities and cities with favourable business climate, strategic asset seeking might be present. The study confirms negative impact of regional business environment risks on foreign firms? location choice. Results will be useful for regional policy aimed at business development and attracting foreign direct investment.

Suggested Citation

  • 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.
  • Handle: RePEc:sek:iefpro:8911539
    as

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    File URL: https://iises.net/proceedings/11th-economics-finance-conference-rome/table-of-content/detail?cid=89&iid=005&rid=11539
    File Function: First version, 2019
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    References listed on IDEAS

    as
    1. Martin, Philippe & Mayer, Thierry & Mayneris, Florian, 2011. "Spatial concentration and plant-level productivity in France," Journal of Urban Economics, Elsevier, vol. 69(2), pages 182-195, March.
    2. Fabienne Boudier‐Bensebaa, 2005. "Agglomeration economies and location choice: Foreign direct investment in Hungary," The Economics of Transition, The European Bank for Reconstruction and Development, vol. 13(4), pages 605-628, October.
    3. Ann E. Harrison & Brian J. Aitken, 1999. "Do Domestic Firms Benefit from Direct Foreign Investment? Evidence from Venezuela," American Economic Review, American Economic Association, vol. 89(3), pages 605-618, June.
    4. Krugman, Paul, 1991. "Increasing Returns and Economic Geography," Journal of Political Economy, University of Chicago Press, vol. 99(3), pages 483-499, June.
    5. repec:spo:wpecon:info:hdl:2441/c8dmi8nm4pdjkuc9g8mc6ihim is not listed on IDEAS
    6. Keith Head & Thierry Mayer, 2004. "Market Potential and the Location of Japanese Investment in the European Union," The Review of Economics and Statistics, MIT Press, vol. 86(4), pages 959-972, November.
    7. 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.
    Full references (including those not matched with items on IDEAS)

    More about this item

    Keywords

    enterprise location choice; cities; agglomeration economies; home market potential; business environment; foreign direct investment; Russia;

    JEL classification:

    • O12 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Microeconomic Analyses of Economic Development
    • R12 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - General Regional Economics - - - Size and Spatial Distributions of Regional Economic Activity; Interregional Trade (economic geography)
    • F21 - International Economics - - International Factor Movements and International Business - - - International Investment; Long-Term Capital Movements

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