Where Has All the Foreign Investment Gone in Russia?
Since its transition to a market economy began, Russia has not attracted much foreign direct investment (FDI). Inflows of FDI into Russia are much lower than those into other transition countries in the region, adjusted for population size and simi...
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| Format: | Policy Research Working Paper |
| Language: | English en_US |
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World Bank, Washington, DC
2014
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| Online Access: | http://documents.worldbank.org/curated/en/2001/07/1552021/all-foreign-investment-gone-russia http://hdl.handle.net/10986/19575 |
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okr-10986-195752021-04-23T14:03:43Z Where Has All the Foreign Investment Gone in Russia? Broadman, Harry G. Recanatini, Francesca CAPITAL FLIGHT CAPITAL FLOWS CENTRAL BANK CENTRAL PLANNING COUNTRY CONTEXT DEPENDENT VARIABLE DEVALUATION DEVELOPED COUNTRIES DOMESTIC DEMAND DOMESTIC MARKETS ECONOMIC ACTIVITY ECONOMIC CHARACTERISTICS ECONOMIC CONDITIONS ECONOMIC DEVELOPMENT ECONOMIC DIMENSION ECONOMIC INCENTIVES ECONOMIC MANAGEMENT ECONOMICS ECONOMISTS EMPIRICAL LITERATURE EMPIRICAL RESULTS EMPIRICAL STUDIES EMPIRICAL WORK ESTIMATED COEFFICIENT EXPLANATORY VARIABLES FDI FINANCIAL CAPITAL FINANCIAL SERVICES FOREIGN CAPITAL FOREIGN DIRECT INVESTMENT FOREIGN EXCHANGE FOREIGN INVESTMENT FOREIGN INVESTORS GDP GROSS DOMESTIC PRODUCT GROSS NATIONAL PRODUCT GROWTH PERFORMANCE HOST COUNTRIES HUMAN CAPITAL IMPORTS INCOME INDUSTRIAL DEVELOPMENT INSTITUTIONAL ANALYSIS INSTITUTIONAL DEVELOPMENT LABOR COSTS LABOR FORCE MARKET ECONOMY MARKET SIZE NATURAL RESOURCES OIL PER CAPITA INCOME POLICY ENVIRONMENT POLICY FRAMEWORK POLICY ISSUES POLICY MAKERS POLICY MEASURES POLICY REFORMS POLICY RESEARCH POLITICAL ECONOMY POLITICAL ELEMENTS POPULATION SIZE POTENTIAL INVESTORS POVERTY REDUCTION PROMOTING GROWTH REDUCING POVERTY REGIONAL DISTRIBUTION REGRESSION ANALYSIS SKEWED DISTRIBUTION SPATIAL DISTRIBUTION STRUCTURAL CHANGE STRUCTURAL REFORMS SUSTAINABLE GROWTH TAX RATES TRANSITION COUNTRIES TRANSITION ECONOMIES TRANSITION PROCESS WAGE RATES WAGES Since its transition to a market economy began, Russia has not attracted much foreign direct investment (FDI). Inflows of FDI into Russia are much lower than those into other transition countries in the region, adjusted for population size and similar measures. Clearly, if Russia is to grow it must increase the level of FDI inflows, which is why a good deal of policy attention has focused on the problem. Equally important for achieving sustainable growth in such a large, heterogeneous economy is learning how to make the spatial distribution of FDI within Russia more even. Inflows are strikingly skewed. Close to 60 percent of FDI goes to four regions in te western part of the country--Moscow City, Moscow oblast, St. Petersburg, and Leningrad oblast--which account for only 22 percent of Russia's gross national product and only 13 percent of Russia's population. Only two of the other 85 regions account for more than 2.5 percent of the country's FDI and most account for much less. Surprisingly, neither policymakers nor observers and analysts have paid much attention to diagnosing the reason for this imbalance in FDI's distribution. The authors try to empirically unbundle the determinants of FDI's regional distribution within Russia. They find that faactors associated with market size, infrastructure development, and the policy environment seem to explain much of the observed variation in FDI flows to regions in Russia. Moreover, the explanatory power of the model that best explains cross-regional variation in FDI flows from 1995 to 1998 changes significantly after the 1998 default and ruble devaluation--suggesting the possibility of a "structural change" in the determination of FDI after the 1998 crisis. 2014-08-21T18:13:25Z 2014-08-21T18:13:25Z 2001-07 http://documents.worldbank.org/curated/en/2001/07/1552021/all-foreign-investment-gone-russia http://hdl.handle.net/10986/19575 English en_US Policy Research Working Paper;No. 2640 CC BY 3.0 IGO http://creativecommons.org/licenses/by/3.0/igo/ World Bank, Washington, DC Publications & Research :: Policy Research Working Paper Publications & Research Europe and Central Asia Russian Federation |
| repository_type |
Digital Repository |
| institution_category |
Foreign Institution |
| institution |
Digital Repositories |
| building |
World Bank Open Knowledge Repository |
| collection |
World Bank |
| language |
English en_US |
| topic |
CAPITAL FLIGHT CAPITAL FLOWS CENTRAL BANK CENTRAL PLANNING COUNTRY CONTEXT DEPENDENT VARIABLE DEVALUATION DEVELOPED COUNTRIES DOMESTIC DEMAND DOMESTIC MARKETS ECONOMIC ACTIVITY ECONOMIC CHARACTERISTICS ECONOMIC CONDITIONS ECONOMIC DEVELOPMENT ECONOMIC DIMENSION ECONOMIC INCENTIVES ECONOMIC MANAGEMENT ECONOMICS ECONOMISTS EMPIRICAL LITERATURE EMPIRICAL RESULTS EMPIRICAL STUDIES EMPIRICAL WORK ESTIMATED COEFFICIENT EXPLANATORY VARIABLES FDI FINANCIAL CAPITAL FINANCIAL SERVICES FOREIGN CAPITAL FOREIGN DIRECT INVESTMENT FOREIGN EXCHANGE FOREIGN INVESTMENT FOREIGN INVESTORS GDP GROSS DOMESTIC PRODUCT GROSS NATIONAL PRODUCT GROWTH PERFORMANCE HOST COUNTRIES HUMAN CAPITAL IMPORTS INCOME INDUSTRIAL DEVELOPMENT INSTITUTIONAL ANALYSIS INSTITUTIONAL DEVELOPMENT LABOR COSTS LABOR FORCE MARKET ECONOMY MARKET SIZE NATURAL RESOURCES OIL PER CAPITA INCOME POLICY ENVIRONMENT POLICY FRAMEWORK POLICY ISSUES POLICY MAKERS POLICY MEASURES POLICY REFORMS POLICY RESEARCH POLITICAL ECONOMY POLITICAL ELEMENTS POPULATION SIZE POTENTIAL INVESTORS POVERTY REDUCTION PROMOTING GROWTH REDUCING POVERTY REGIONAL DISTRIBUTION REGRESSION ANALYSIS SKEWED DISTRIBUTION SPATIAL DISTRIBUTION STRUCTURAL CHANGE STRUCTURAL REFORMS SUSTAINABLE GROWTH TAX RATES TRANSITION COUNTRIES TRANSITION ECONOMIES TRANSITION PROCESS WAGE RATES WAGES |
| spellingShingle |
CAPITAL FLIGHT CAPITAL FLOWS CENTRAL BANK CENTRAL PLANNING COUNTRY CONTEXT DEPENDENT VARIABLE DEVALUATION DEVELOPED COUNTRIES DOMESTIC DEMAND DOMESTIC MARKETS ECONOMIC ACTIVITY ECONOMIC CHARACTERISTICS ECONOMIC CONDITIONS ECONOMIC DEVELOPMENT ECONOMIC DIMENSION ECONOMIC INCENTIVES ECONOMIC MANAGEMENT ECONOMICS ECONOMISTS EMPIRICAL LITERATURE EMPIRICAL RESULTS EMPIRICAL STUDIES EMPIRICAL WORK ESTIMATED COEFFICIENT EXPLANATORY VARIABLES FDI FINANCIAL CAPITAL FINANCIAL SERVICES FOREIGN CAPITAL FOREIGN DIRECT INVESTMENT FOREIGN EXCHANGE FOREIGN INVESTMENT FOREIGN INVESTORS GDP GROSS DOMESTIC PRODUCT GROSS NATIONAL PRODUCT GROWTH PERFORMANCE HOST COUNTRIES HUMAN CAPITAL IMPORTS INCOME INDUSTRIAL DEVELOPMENT INSTITUTIONAL ANALYSIS INSTITUTIONAL DEVELOPMENT LABOR COSTS LABOR FORCE MARKET ECONOMY MARKET SIZE NATURAL RESOURCES OIL PER CAPITA INCOME POLICY ENVIRONMENT POLICY FRAMEWORK POLICY ISSUES POLICY MAKERS POLICY MEASURES POLICY REFORMS POLICY RESEARCH POLITICAL ECONOMY POLITICAL ELEMENTS POPULATION SIZE POTENTIAL INVESTORS POVERTY REDUCTION PROMOTING GROWTH REDUCING POVERTY REGIONAL DISTRIBUTION REGRESSION ANALYSIS SKEWED DISTRIBUTION SPATIAL DISTRIBUTION STRUCTURAL CHANGE STRUCTURAL REFORMS SUSTAINABLE GROWTH TAX RATES TRANSITION COUNTRIES TRANSITION ECONOMIES TRANSITION PROCESS WAGE RATES WAGES Broadman, Harry G. Recanatini, Francesca Where Has All the Foreign Investment Gone in Russia? |
| geographic_facet |
Europe and Central Asia Russian Federation |
| relation |
Policy Research Working Paper;No. 2640 |
| description |
Since its transition to a market economy
began, Russia has not attracted much foreign direct
investment (FDI). Inflows of FDI into Russia are much lower
than those into other transition countries in the region,
adjusted for population size and similar measures. Clearly,
if Russia is to grow it must increase the level of FDI
inflows, which is why a good deal of policy attention has
focused on the problem. Equally important for achieving
sustainable growth in such a large, heterogeneous economy is
learning how to make the spatial distribution of FDI within
Russia more even. Inflows are strikingly skewed. Close to 60
percent of FDI goes to four regions in te western part of
the country--Moscow City, Moscow oblast, St. Petersburg, and
Leningrad oblast--which account for only 22 percent of
Russia's gross national product and only 13 percent of
Russia's population. Only two of the other 85 regions
account for more than 2.5 percent of the country's FDI
and most account for much less. Surprisingly, neither
policymakers nor observers and analysts have paid much
attention to diagnosing the reason for this imbalance in
FDI's distribution. The authors try to empirically
unbundle the determinants of FDI's regional
distribution within Russia. They find that faactors
associated with market size, infrastructure development, and
the policy environment seem to explain much of the observed
variation in FDI flows to regions in Russia. Moreover, the
explanatory power of the model that best explains
cross-regional variation in FDI flows from 1995 to 1998
changes significantly after the 1998 default and ruble
devaluation--suggesting the possibility of a
"structural change" in the determination of FDI
after the 1998 crisis. |
| format |
Publications & Research :: Policy Research Working Paper |
| author |
Broadman, Harry G. Recanatini, Francesca |
| author_facet |
Broadman, Harry G. Recanatini, Francesca |
| author_sort |
Broadman, Harry G. |
| title |
Where Has All the Foreign Investment Gone in Russia? |
| title_short |
Where Has All the Foreign Investment Gone in Russia? |
| title_full |
Where Has All the Foreign Investment Gone in Russia? |
| title_fullStr |
Where Has All the Foreign Investment Gone in Russia? |
| title_full_unstemmed |
Where Has All the Foreign Investment Gone in Russia? |
| title_sort |
where has all the foreign investment gone in russia? |
| publisher |
World Bank, Washington, DC |
| publishDate |
2014 |
| url |
http://documents.worldbank.org/curated/en/2001/07/1552021/all-foreign-investment-gone-russia http://hdl.handle.net/10986/19575 |
| _version_ |
1764440054554427392 |