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Foreign direct investments distribution in the Russian Federation: do spatial effects matter?

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  • Tullio Buccellato
  • Francesco Santangelo

Abstract

In this paper we explore the hypothesis of spatial effects in the distribution of Foreign Direct Investments (FDI) across Russian regions. We make use of a model, which describes FDI inflows as resulting from an agglomeration effect (the level of FDI in a given region depends positively on the level of FDI received by the regions in its neighbourhood) and remoteness effect (the distance of each Russian regions from the most important outflows countries). Considering a panel of 68 Russian regions over the period 2000-2004 we find that the two effects play a significant role in determining FDI inflows towards Russia. The two effects are also robust to the inclusion of other widely used explanatory variables impacting the level of FDI towards countries or regions (e.g. surrounding market potential, infrastructures, investment climate).

Suggested Citation

  • 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).
    • Handle: RePEc:see:wpaper:99
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    4. I. P. Glazyrina & L. M. Faleychik & A. A. Faleychik, 2020. "Russia’s Eastern Border: Spatial Heterogeneity of Incomes and Problems of Population Retention," Regional Research of Russia, Springer, vol. 10(4), pages 476-493, October.
    5. Gladysheva, Anna & Ratnikova, Tatiana, 2013. "The determinants of the distribution of foreign direct investment in Russian food industry companies," Applied Econometrics, Russian Presidential Academy of National Economy and Public Administration (RANEPA), vol. 29(1), pages 97-116.
    6. Obeng, Camara Kwasi, 2016. "Effect of location incentives on regional distribution of foreign direct investment in Ghana," MPRA Paper 70131, University Library of Munich, Germany.

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