 Foreign direct investment in Russia's regions 1993‐95. Why so little and where has it gone?The Economics of Transition, 1998, vol. 6, issue 2, 349-360 Abstract: In this paper, foreign direct investment (FDI) into Russia's regions during the period 1993‐95 is analysed using recently available regional data. Russia's regions are shown to be much richer than China's, but much poorer than US states, though with far less FDI than either country. FDI into the regions is also low compared to both Western and Eastern European countries, but has grown substantially from very low levels. Relatively higher FDI is found to occur when crime is lower, market size is bigger and risk is less. Surprisingly, the education of the workforce is found to be important only in the two major cities of St. Petersburg and Moscow, suggesting FDI into Russia's regions is not drawn by cheap labour. Unlike other countries, no evidence for either infrastructure or privatization influencing FDI could be found. The use of tax breaks and exemptions to attract FDI may be short‐sighted as the consequent cut in budget revenues hampers the ability of the region to fight crime and to lower business risk, resulting in an implicit marginal tax increase for future foreign investors that exceeds any benefits from shortterm tax breaks. Date: 1998 Downloads: (external link) Related works: Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text Persistent link: https://EconPapers.repec.org/RePEc:bla:etrans:v:6:y:1998:i:2:p:349-360 Ordering information: This journal article can be ordered from Access Statistics for this article The Economics of Transition is currently edited by Philippe Aghion and Wendy Carlin More articles in The Economics of Transition from The European Bank for Reconstruction and Development Contact information at EDIRC. |
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