Foreign direct investments distribution in the Russian Federation: do spatial effects matter? (original) (raw)
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What causes the regional disparity of FDI in Russia? A spatial analysis
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We analyse the determinants of the regional disparity in attracting FDI in Russia using additions to fixed capital investment by foreign firms as the measure of FDI. The spatial distribution of FDI is attributed to regional and/or trans-regional factors. Region specific characteristics such as wage, education level, transportation as well as gross regional product, which accounts for market size, in host and alternative regions are considered to analyze the spatial interaction between regions employing spatial econometrics. We find that shocks to FDI levels in proximate regions have no effect on FDI inflows to hosts. However, FDI in a region depends on spatial market size and endowment of natural resources. JEL classifications: F21, C31, R12
2010
A bulk of empirical literature has emerged that explores the role of various location factors as determinants of Foreign Direct Investment (FDI) in Central and Eastern European Countries (CEECs). A notable feature of these studies is that their empirical approaches abstract from third-country (spatial) effects in FDI across the home and host country dimensions. Neglecting these effects could bias results concerning the role of location factors for attracting FDI. This in turn may lead to misguided economic policy conclusions. The current paper adds to the literature by applying the recently proposed spatial "origin-destination-flow model" of LeSage and Pace (2008) to FDI flows from 7 Western OECD home countries to 8 CEE host countries. Controlling for country-pair and time effects our results indicate that (a) spatial interactions across the host country dimension matter for FDI revealing that vertical complex FDI flows dominate total FDI flows to CEECs; (b) spatial autocorrelation in the home country dimension is absent; (c) results of previous studies remain valid as coefficient estimates on location factors change only slightly when spatial interdependencies are considered and (d) effective corporate income taxes and the endowment with production-related material infrastructure are statistically and economically significant determinants of FDI in CEECs.
Foreign Direct Investment in Russia: Unfavorable Investment Climate, Uneven Distribution
International Journal of Academic Research in Business and Social Sciences, 2015
Foreign direct investment may be an important source of economic development for nations. Acceleration of mobility of capital with globalization has increased foreign direct investment flows around the world. Although being one of the largest economies in the world, Russia has not been getting expected amount of foreign direct investment. Furthermore, foreign direct investment to Russia has been concentrating in a limited number of regions, amplifying regional inequalities. Inadequate foreign direct investment performance of Russia is a result of structural imbalances and legal background. In this study, importance and development of foreign direct investment in the Russian economy are investigated. In this context, benefits and negative impacts of foreign direct investment to the Russian economy and its negative impacts on it were discussed. Factors which make the country attractive to the foreign direct investment and impede foreign investment were examined as well as the sources of and solutions to the problem of uneven regional distribution of foreign direct investment. In order for Russia to attract more foreign direct investment, a favorable investment climate must be formed with modifications at the state policy level. Strategic participatory regional planning approach must be adopted to increase FDI flows to the Russian regions.
Interregional differentiation of investment attractiveness in Russia: new evaluation tool
E3S Web of Conferences, 2021
The insufficient validity of the positioning of regions in different Russian investment ratings, in particular, the observed convergence of regional assessments, is due to a number of methodological problems. The purpose of the study is to develop a tool to determine the impact of various components of investment attractiveness on the growth of investment activity in the regions and to ensure a balance of interests of the actors of the investment process (regional government bodies, private investors, the population). We developed an original system of indicators for comprehensive assessment of the investment attractiveness of regions including productional, financial, socio-economic, natural, innovative, infrastructure, and personnel components and proposed the balanced assessment method. Based on the matrix of integral indicators we show significant interregional differentiation of investment attractiveness for the North-Western Federal District and determine the key factors of in...
The spatial distribution of FDI across European regions: does a country effect exist?
freit.org
This study aims at investigating empirically the factors that drive the uneven distribution of foreign direct investments (FDI) inflows to European regions. In order to achieve our research objective, we first perform a detailed analysis of the location determinants of foreign investments and then we try to understand whether and to what extent regions' capacity to attract FDI is strengthen or hampered by a "country effect", which can take two different forms. The first relates to the relative performance of the country a region belongs to in Europe (between country effect), while the second concerns the relative performance of regions' within their own country (within country effect). Once identified the "national" and the "regional" components of factors able to attract FDI, more effective FDI promotion policies can be implemented at national, regional and sectoral levels.
Drivers of economic growth and investment attractiveness of Russian regions
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Spatial complexity and interactions in regions' FDI attractiveness
2013
This study investigates the factors that drive the distribution of foreign direct investments (FDI) into European regions, trying to disentangle the spatial complexity of this economic relationship. In particular, we argue that regions' capacity to attract FDI is affected by own-country effects, which can take two different forms: the first relates to the relative performance of the country a region belongs to in Europe (between country effect) while the second concerns the relative performance of regions' within their own countries (within country effect). We find that own country effects exist, though the within country effect is weaker than the between country effect. The absolute performance of countries is able to affect that of their own regions along many axes, on top of region's absolute performance. When modelling spatial interactions and spillovers, it also emerges a clear pattern of territorial competition among regions in attracting FDI.
The Journal of International Trade & Economic Development, 2013
Based on a spatially augmented gravity model the current paper isolates spatial interrelationships in Foreign Direct Investment (FDI) to Central and Eastern European Countries (CEECs) not only across the destination but also across the origin country dimension of FDI. Results show that: (i) spatial interrelationships across destination countries are present and are consistent with the predominance of vertical-complex FDI in total FDI; (ii) spatial correlation across origin countries is given in earlier years of transition, while demonstration and competition effects cancel over the whole sample period; and (iii) agglomeration forces gain in importance for FDI to CEECs.
RePEc: Research Papers in Economics, 2012
Based on a spatially augmented gravity model the current paper isolates spatial interrelationships in Foreign Direct Investment (FDI) to Central and Eastern European Countries (CEECs) not only across the destination but also across the origin country dimension of FDI. Results show that: (i) spatial interrelationships across destination countries are present and are consistent with the predominance of vertical-complex FDI in total FDI; (ii) spatial correlation across origin countries is given in earlier years of transition, while demonstration and competition effects cancel over the whole sample period; and (iii) agglomeration forces gain in importance for FDI to CEECs.
Investment Attraction Of Russian Regions In The Beginning Of XXI Century
World practice indicates that investment growth is the basis of economic growth both at the state level and at regional level. The acknowledgement is the experience of the majority of the countries which made a breakthrough in economic development during the last decades. The Russian Federation is a federative state. Under conditions of federative state the regional level in the system of foreign trade activities is fundamental.