Regional Distribution of Foreign Direct Investment in the Russian Economy

Abstract

The article studies the investment aspects of Russian regional foreign economic activity in order to identify changes in the regional distribution of foreign direct investment (FDI). The hypothesis of a decrease in the regional concentration of investments is based on favorable prerequisites, manifested in the sectoral diversification of new projects, the growth of foreign investors’ interest in Russian regions, and increased efforts by regional authorities to attract investments in complex foreign policy and economic conditions. The study uses relative indicators characterizing investment flows and FDI accumulated in the Russian regions taking into account the scale of their economies, as well as concentration indicators based on the Herfindahl–Hirschman index. The study analyzes the dynamics of the indicators of the percentage of FDI to GRP and the indicators of the percentage of FDI accumulated in regions to GRP; the indicators of the concentration of FDI and GRP are calculated and analyzed. The scope of the results covers regional economics and investment policy. Relative investment indicators confirm the high concentration of regional FDI distribution and indicate a significant dependence on foreign investment in Sakhalin, Vologda, and Lipetsk oblasts, where accumulated FDI exceeds GRP. There are no significant changes in the long-term indicators. The leading positions are stably occupied by the Central and Far Eastern federal districts. Short-term indicators of the relative attractiveness of Russian regions for new projects indicates a trend toward diversification of the regional distribution of FDI: the leaders include the Ural and Siberian federal districts. The trend detected for federal districts is manifested at a disaggregated level: in the distribution of FDI between federal subjects, a decrease in concentration is observed.