| It has been widely recognized that Russia attracts a low level of inward FDI if compared with other countries with transitional economies. FDI attractiveness of Russian Federation seems quite small also with regards to the country’s potential. Russia enjoys a huge domestic market, an impressive natural resources endowments and the presence of a skilled and relatively cheap labor force admittedly. Nevertheless, a broadly recognized refrain for foreign investors is the institutional environment, which has been determined by the fragileness of property rights, the arbitrariness of fiscal policy and the unpredictability of the trade policies.Foreign investments in Russia has distinctive feature-the correlation of inward and outward investment flows between Russia and key offshore financial centers (OFC’s) such as Cyprus and British Virgin Islands (BVI). According to Russian statistics, the key offshore destinations of Russian-registered capital outflows, Cyprus and BVI, are persistent among the major source countries of inward foreign investment into Russia. And as in accordance to Perez et al. (2012) study over 20% FDI in money laundering countries from a selection of transition countries were made to facilitate illicit money flows, it is plausible to suggest that there should be a strong relationship between corruption money laundering and round-trip investment in Russia.Another feature is inflows to the Russian Federation are very unevenly distributed-some regions are the main recipients of investments while others are experiencing a chronic shortage of them. Thus, it can be assumed that the potential of the Russian economy cannot be fully implemented due to the non-optimal allocation of investment resources. Promising areas are not getting the right amount of FDI, therefore, cannot exercise lucrative infrastructure projects and unpromising regions with raw, primitive economic structure can spend the investment resources less efficiently because of their large volume. In this way, it is of great interest to study the dependence of the econometric indicators of regional concentration of FDI and economic growth. We use a panel data modeling to research the impact of FDI on regional economic growth in Russian Federation. From the modeling results, we conclude that the most important factor of economic growth in Russian regions in the analyzed period was a domestic investment, a typical result in the theoretical and empirical literature. FDI (Foreign direct investments) is also positively correlated with economic growth, but it’s magnitude is relatively lower; this may indicate that regional authorities do not use foreign investments effectively. The result may be due to their small amounts. The insignificance of foreign direct investment may also be explained by its inefficient industrial distribution across industries, it also can be concluded that FDI has such effect on growth in countries that have a low stock of human capital; are relatively closed to trade; or are characterized by low quality institutions.We determine the optimal value of regional economic inequalities for GDP and its pace; we found that the current mode of operation of the Russian economy in high-value areas of economic differentiation has exhausted itself and is destructive, despite the formal increase in GDP. Thus, the updated issue is a reducing disparities in the economic development of regions in Russian Federation, by necessary operational and radical decisions from Russian central and local governments in the areas of taxation, fiscal and investment policies.Our research also includes an analysis of case study of Khabarovsk Territory, have been relatively successful in attracting foreign direct investment. We considered in detail the structure of FDI inflows in these region, the main factors of investment attractiveness, as well as specific examples of projects implemented with the involvement of foreign capital. Case studyis prepared on the basis of comments by senior representatives of the region.
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