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

Tullio Buccellato and Francesco Santangelo

No 99, UCL SSEES Economics and Business working paper series from UCL School of Slavonic and East European Studies (SSEES)

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).

Date: 2009-01
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Citations: View citations in EconPapers (6)

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Persistent link: https://EconPapers.repec.org/RePEc:see:wpaper:99

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