Institutions and inward foreign direct investment in Russia : the role of market institutions in attracting inward FDI

Abstract

The central objective of this thesis is to examine how the state of modern market institutions in Russia influences inward FDI in the country. Particularly, we seek to identify if there is a clear relationship between the quality of the institutional environment and the level of inward FDI in Russia. To achieve the objective, two research approaches have been used in this research. First, we looked at the Russian institutional environment on a regional level and examine how institutional environment in Russia's federal regions influences FDI inflows into those regions. In the second approach, we attempted to understand what particular components of the Russian institutional environment in general are perceived as the most important obstacles to inward FDI flows to Russia. The results of the analysis revealed that market institutions in Russia indeed influence inward FDI flows into the country and there is a positive relationship between the quality of institutional environment and the level of inward FDI in Russia.