FDI Regulatory Improvement Based on Location-Specific Advantages of Russian Federation

This research considers the evolution of FDI theories, revealing the advantages and disadvantages of each theory, which have been described in the scientific literature. The research aims to determine the most significant determinants of FDI inflow in CIS countries in order to develop government regulation of FDI in Russia based on location-specific advantages. The effect of determinants of FDI on FDI inflow is examined. The research investigates the location-specific advantages of FDI inflow to the host country through confirming or refuting considered theories by empirical findings of existing quantitative studies. The quantitative part of this research is presented by econometric modeling, which is based on the considered FDI theories and is used on panel data of CIS countries from 1999 until 2018. The panel data set contains a numerical value of 9 variables from 5 different sources. It was found out, that the long-run determinants of FDI in CIS countries are Dutch Disease, Exchange rate and Openness of trade. Eight out of nine determinants are statistically significant in short-run in Russia. Thus, comparative location-specific advantages of the Russian Federation is empirically shown and several steps are proposed to regulate FDI inflow better. Keywords: FDI, determinants, government regulation