Foreign Direct Investment from China in the Regions of Russia: Are They Substitutes or Compliments of Foreign Trade?

Alina Nikolaevna Novopashina ()
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Alina Nikolaevna Novopashina: Amur State University; Economic Research Institute FEB RAS

Spatial Economics=Prostranstvennaya Ekonomika, 2012, issue 4, 67-86

Abstract: The study summarizes theoretical approaches explaining the conditions under which foreign direct investment (FDI) can complement or substitute foreign trade depending on investment incentives. The author examines the example of investment and trade cooperation between cross-border and internal regions of Russia and China. Using regression analysis of China’s FDI impact on the foreign trade of Russian regions with China the author concludes that cross-border regions can attract China’s FDI because of their comparative advantages. The paper also employs FDI localization ratios in cross-border and internal regions and the structure of China’s FDI by different activities. The study shows that FDI from China can complement foreign trade with China in cross-border regions. However internal regions attract FDI from China mostly because of access to their home markets, and in this case FDI are substitutes of foreign trade with China

Keywords: foreign direct investment; foreign trade; investment-complements of trade; investmentsubstitutes of trade; cross-border regions; internal regions; Russia; China (search for similar items in EconPapers)
Date: 2012
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Persistent link: https://EconPapers.repec.org/RePEc:far:spaeco:y:2012:i:4:p:67-86

DOI: 10.14530/se.2012.4.067-086

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