Importance In connection with the high degree of depreciation of the Russian enterprises' fixed assets, the problem of attracting investment in the domestic economy is urgent. We have selected the theme of the study because the foreign direct investment (FDI) lead to the creation of the new production capacities, or they enhance the demand for the existing ones. In addition, the dynamics of the FDI is an important indicator of the assessment of the prospects of the national economy development. The expediency of the work lies in the fact that the Russian economists focus attention usually on an outflow of capital from the country, in spite of the fact that the FDI influx has increased greatly in recent years as well. Objectives The purpose of this paper is to study an economic variable that affects the GDP dynamics. We have analyzed the results of the impact of foreign direct investment on the economic growth of different countries, investigated the FDI dynamics in the Russian economy, and also identified the macroeconomic variables that impact their level. Methods We used a method of vector auto regression (VAR) besides the method of verbal analysis. The VAR method is the most popular statistical method in the modern foreign economic studies. Results We have identified the positive and negative aspects of the foreign direct investment, highlighted their leading indicators. We have constructed the vector auto regression equations, as well as analyzed the economic meaning of the signs, which are reflected in the beta coefficients in these equations. The obtained results may be used while taking the decision on the expediency of enhancing of the FDI volumes. Our paper presents the empirically identified directions of improving the investment climate of the country. Conclusions and Relevance We arrived at a conclusion that the national governments should not blindly follow the neo-liberal doctrine and should not neglect the regulation and control of the FDI flow. The foreign investment should be directed in those sectors of the economy that serve as a priority for the recipient country, and not for the benefits of multinational corporations.
Keywords: foreign direct investment, economic growth rate, index, capital, investor
References:
Ivanchenko I.S. Perspektivy sozdaniya mezhdunarodnogo finansovogo tsentra v Moskve [The prospects for establishing an international financial center in Moscow]. Finansovaya analitika: problemy i resheniya – Financial analytics: science and experience, 2014, no. 25, pp. 2–10.
Ilyukhina E. Inostrannye investitsii [Foreign investment]. Ekonomicheskoe razvitie Rossii – Russia's economic development, 2011, vol. 18, no. 7, pp. 18–22.
Ekonomicheskaya entsiklopediya [The economic encyclopedia]. Moscow, Ekonomika Publ., 1999, 1055 p.
Bissinger J. Foreign Investment in Myanmar: A Resource Boom but a Development Bust? Contemporary Southeast Asia, 2012, vol. 34, no. 1, pp. 23–52.
Chee-Keong Choong, Venus Khim-Sen Liew, Sok-Gee Chan, Huck-Khoon Ch’ng. Foreign direct investment volatility and economic growth in ASEAN-five countries. International journal of academic research, 2011, July, vol. 3, no. 4, part 1, pp. 221–224.
Drahokoupil J. The Investment-Promotion Machines: The Politics of Foreign Direct Investment Promotion in Central and Eastern Europe. Europe-Asia Studies, 2008, March, vol. 60, no. 2, pp. 197–225.
Ford T.C., Rork J.C., Elmslie B.T. Considering the source: Does the country of origin of FDI matter to economic growth? Journal of regional science, 2008, vol. 48, no. 2, pp. 329–357.
Friedman J., Gerlowski D.A., Silberman J. What Attracts Foreign Multinational Corporations? Evidence from Branch Plant Location in the U.S. Journal of Regional Science, 1992, vol. 32, pp. 403–418.
Hasnah A., Er A.C., Ahmad A.R., Lyndon N., Ahmad S. An Analysis of the Impact of Foreign Investment on Regional Disparities: A Case of Malaysia. Asian Social Science, 2013, vol. 9, no. 14, pp. 7–17.
De Mello L.R.Jr. Foreign Direct Investment-Led Growth: Evidence from Time Series and Panel Data. Oxford Economic Papers, 1999, no. 51, pp. 133–51.
Moosa I.A. Foreign Direct Investment: Theory, Evidence and Practice. New York, Palgrave, 2002.
Mortimore M., Vergara S. Targeting Winners: Can Foreign Direct Investment Policy Help Developing Countries Industrialise? The European Journal of Development Research, 2004, Autumn, vol. 16, no. 3, pp. 499–530.
Mullen J.K., Williams M. Foreign Direct Investment and Regional Economic Performance. Kyklos, 2005, vol. 58, no. 2, pp. 265–282.
Quijano A. A Guide to BEA Statistics on Foreign Direct Investment in the United States. Survey of Current Business, 1990, no. 70, pp. 29–37.
Raviv O. Chasing the dragon east: exploring the frontiers of Western European finance. Contemporary Politics, 2008, September, vol. 14, no. 3, pp. 297–314.
Smith P. Opening the door to foreign investment in the Arab world. The Middle East, 2008, May, pp. 28–31.
