The impact of exchange rate dynamics on foreign direct investments inflow to the Russian Federation

A. Loshchenkova and Yu. Zaytsev
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A. Loshchenkova: Russian Presidential Academy of National Economy and Public Administration, Moscow, Russia
Yu. Zaytsev: Moscow State Institute of International Relations (MGIMO University), Moscow, Russia

Journal of the New Economic Association, 2019, vol. 44, issue 4, 127-142

Abstract: The study reflects current issues of investment cooperation between the Russian Federation and foreign countries, the specificity of which has been particularly affected by Western economic sanctions and Russian anti-sanctions of the last four years. The economic crisis of the period 2014-2017 in the Russian Federation revealed a number of patterns related to changes in the exchange rate and the dynamics of incoming foreign direct investment (FDI) in Russia. In their study, based on macroeconomic modeling, the authors assess the impact of the level of the exchange rate on FDI inflows to the countries of the world and to the Russian Federation at the regional and sectoral levels. The results of the work made it possible to establish that strengthening the real ruble exchange rate increases the potential of the domestic market in the region, industry and the Russian Federation as a whole: there is an influx of FDI into the economy. The conducted study revealed the key areas of investment cooperation of the Russian Federation. Based on the studied experience and practice, the authors offer a number of recommendations for the Russian Federation on investment cooperation with foreign countries, taking into account the existing potential in various sectors and regions of the Russian Federation.

Keywords: foreign direct investments; exchange rate; Russian ruble; horizontal investments; vertical investments; Russian Federation (search for similar items in EconPapers)
JEL-codes: F41 F65 (search for similar items in EconPapers)
Date: 2019
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Citations: View citations in EconPapers (1)

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Persistent link: https://EconPapers.repec.org/RePEc:nea:journl:y:2019:i:44:p:127-142

DOI: 10.31737/2221-2264-2019-44-4-4

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