Research On Regional Distribution Of FDI In The Russian Federation And Its Effect On Economic Growth

Recently FDI indicators show the main trends of economic development in a globalized world, particularly, the majority of developing countries are trying to attract FDI in order to enhance domestic economic growth. Russia is among these countries too, is refining the law structure, collaborating encourage policies for more FDI possibilities, adopting beneficial tax policy to incentive FDI’s scale expand. Even though the total number of FDI in foreign capital investment is low and the proportion to GDP is still not high enough, industry and regional distribution is not quite expedient and further improvement in the investment environment has also being problem, however Russia has a potential to become one of the main region for FDI in the nearest time. This paper analyzes the current situation and characteristics of FDI in Russia and conducted the measurement analysis and empirical research, resulting in findings that the Russian FDI cannot be entirely considered as a genuine foreign direct investment, due to Russia’s period of economic transition in the 1990 s the colossal capital flight phenomenon, and the return of their initial Russian funds again as false FDI. The main factors that stop the successful development of Russian FDI are: fragile political environment, underdevelopment of the modern market system, and the solid domestic monopoly power. FDI’s future exploration in Russia is primarily to customize the economic structure, promote the development of up-to-date agricultural production and the elaboration of high-tech industry.