Impact of Foreign Direct Investment From Offshoring on the Efficiency of Russian Companies

Влияние прямых иностранных инвестиций из офшоров на эффективность российских компаний

Fedorova, Elena (Федорова, Елена) (), Tregubova, Mariya (Трегубова, Мария) () and Komletsova, Varvara (Комлецова, Варвара) ()
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Fedorova, Elena (Федорова, Елена): Financial University under the Government of the Russian Federation
Tregubova, Mariya (Трегубова, Мария): MegaFon PJSC
Komletsova, Varvara (Комлецова, Варвара): Moscow Representative Office of Hines International, Inc.

Ekonomicheskaya Politika / Economic Policy, 2023, vol. 4, 58-77

Abstract: This paper examines the impact of foreign direct investment (FDI) from offshoring and developed countries on the efficiency of Russian companies. The empirical basis for this analysis includes the financial performance of 18,804 domestic companies from 2013 to 2020, which provided 150,432 data points. The research methodology included panel regression and DEA data shell analysis, which enables comprehensive analysis of a company’s performance in comparison with other companies. Both horizontal and vertical spillover effects were determined in order to trace the effect of offshore companies. Horizontal spillover consists of the side effects on productivity that exclusively national firms are subject to when operating in the same industry alongside firms with foreign investment. Vertical spillover is due to reciprocal and direct links between foreign companies and their suppliers and buyers. This study indicates that efficiency measured in terms of spillover effects is greater for companies with FDI from white offshores than for companies with FDI from gray and black offshores. Furthermore, the efficiency of investment from developed countries in terms of spillover effects is greater than that of investment from gray and black offshores. The spillover effects from investment by gray and black offshores is negligible because of the return of capital. These results may be informative for the top management of Russian enterprises, shareholders, boards of directors, specialists from financial and tax services, analysts, the Ministry of Finance of the Russian Federation, the Federal Tax Service and other interested parties.

Keywords: spillover effect; white offshores; black and gray offshores; returning capital; theory of institutional arbitrage. (search for similar items in EconPapers)
JEL-codes: E22 F21 F23 P45 (search for similar items in EconPapers)
Date: 2023
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