The Impact of FDI on Effectiveness of Companies in Russia

This research paper is devoted to the study of FDI spillovers and its effects on the effectiveness of companies in Russia. Authors cover different aspects of FDI spillovers and study how the impact of FDI on local companies varies with the country of origin of international investor, percentage of ownership held by foreign direct investor and industry in which FDI are allocated. The primary focus of the study is analysis of FDI spillovers from countries that imposed sanctions on Russia in 2014. This allows figuring out how important to the economy where these actions and what are the consequences with regard to effectiveness of local companies. Authors analyze more than 33’000 local companies, whose financial statements are obtained from Ruslana database for the years 2011-2015. The analysis shows that FDI from countries that imposed sanctions on Russia in 2014 are more pronounced that the ones received from other countries, however FDI from China have significant potential to influence positively effectiveness of local companies in the future.