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ANALYSIS OF INVESTMENT CLIMATE IN RUSSIA BY THE EXAMPLE OF FOREIGN DIRECT INVESTMENT

G. Singatullina, K. Altman

Abstract

Creating and maintaining a strong investment climate in the economy is the important initial precondition for solving problems to ensure economic growth and competitiveness of the country in terms of its integration into the world economy. Despite the fact that the Russian market has the potential to become attractive for foreign investors, it is characterized by unpredictability, which prevents the flow of foreign investments into the country. Our retrospective analysis showed that the formation of a positive investment climate is largely dependent on political and economic stability in the country, which was affected by the crises in 1998, 2008 and 2014. Nowadays, despite the improvement of certain factors influencing investment attractiveness, such as forming the business environment, investment climate remains poor. The Russian economy is in need of an inclusive series of measures by the government that would cover all areas of economic life. A five-factor regression model was created in order to analyze investment climate in Russia. Economic indicators that were used for the analysis are dated from 1995 to 2015. The amount of foreign direct investment served as an explained variable. The following factors were taken as explanatory variables: refinancing rate, the share of enterprises engaged in innovation activities, the return on assets, the share of infrastructure spending in GDP and export of primary energy resources. Based on the test model, we can conclude that our multiple regression model is appropriate for predicting foreign direct investment. The presented model allows to determine the factors that need to be considered primarily while developing the government investment policy. The factors selected for our model show a multidimensional approach to the analysis of foreign direct investment, because they include the impact of financial, innovation, infrastructure and resource components of the investment attractiveness. Therefore, the article outlines current problems and suggests possible measures for their solution in order to improve the investment climate and attract foreign investments. Effective government policy at the federal and regional level will allow to achieve high results on the way to the formation of a positive investment climate.

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DOI resolver: doi.org/10.5593/SGEMSOCIAL2017/HB11/S03.068

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