The Dynamics and Determinants of FDI in Russia

By Hadjila Krifa-Schneider, Nicolas Bauduin

English

Why is Russia less attractive than other emerging countries for foreign investors? To answer this question, some empirical facts about the recent changes in Foreign Direct Investments (FDI) in Russia are presented. The main theoretical factors behind a territory’s attractiveness for this kind of investments are discussed. An econometrical analysis of the determinants of FDIs in Central and Eastern Europe, some ex- Soviet bloc countries, in Russia, China and India are presented. It shows that, especially for Russia, there is a significant negative "country-effect" which tends to indicate that factors still remain that has a negative impact for this country. When the "risk" variable is introduced, it supports a significant explanation, especially in Russia, where the country-effect disappears. JEL codes: E22, F21, G32, P52.

Keywords

  • attractiveness
  • foreign direct investments
  • risk
  • Russia
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