The value of waiting: Russia's integration into the international capital markets

Claudia Buch, Ralph P. Heinrich and Christian Pierdzioch

No 860, Kiel Working Papers from Kiel Institute for the World Economy (IfW Kiel)

Abstract: Capital flight has characterized the transformation process in Russia. Inflows of foreign direct investment have been minor and have been preceeded by inflows of portfolio capital. The paper shows that uncertainty about macroeconomic stabilization exhibits a strong negative effect on the volume of capital inflows when investment decisions are irreversible. Reducing uncertainty may but must not necessarily lead to more investment. The fact that monetary stabilization policies have not been accompanied by comprehensive institutional reforms can explain the pattern of Russia's capital flows in general and the dismal performance in attracting foreign direct investment in particular.

JEL-codes: E58 F21 F33 F41 (search for similar items in EconPapers)
Date: 1998
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Related works:
Journal Article: The Value of Waiting: Russia's Integration into the International Capital Markets (1999)
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Persistent link: https://EconPapers.repec.org/RePEc:zbw:ifwkwp:860

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