Location of Russian Enterprises of Foreign Corporations Opened in 2012–2018

Abstract

Industrial enterprises owned by foreign corporations continue to occupy important positions in many sectors of the Russian economy, including the automotive industry, many sectors of the food industry, a number of machinery industry segments, certain segments of construction and finishing materials production, and pharmaceuticals. The study illustrates the location of new production facilities commissioned by Western corporations in Russia in 2012–2018. The openings of 261 plants were identified. Twenty federal subjects accounted for 80% of the facilities opened by foreign investors. Despite the diversity of industries and difference in countries of origin, the vast majority of new facilities are focused on a fairly narrow set of objective and subjective location factors: the proximity of suppliers and consumers, the availability of skilled labor force, guaranteed infrastructure, and visible interest of local authorities in creating normal working conditions. Although the production of consumer goods continues to grow, foreign industrial investments are increasingly concentrated in the B2B sector, with the main emphasis not on increasing output of finished products, but on the production of parts, components, additives, and outsourcing of industrial services. Although the Central Region (Moscow and neighboring oblasts, especially Kaluga, and, to a lesser extent, Tver, Tula, and Vladimir oblasts) continues to be a center of attraction for foreign industrial investments. The successes of the Republic of Tatarstan and Lipetsk, Nizhny Novgorod, Samara, and Ulyanovsk oblasts show that with due attention of local authorities, relying on a combination of various forms of special territories (special economic zones, industrial parks), a “cascade effect” takes place when foreign investors enjoy the success of previous investment projects and try to replicate it.