Evaluation of Russian OFDI based on balance of payments and OECD data (before COVID-19)

Serzhena Tcyrempilova, Can Ertugrul, Mihály Hegedűs, Mohammad Daud Ali, Lóránt Dénes Dávid, Róbert Magda

Article ID: 3717
Vol 8, Issue 6, 2024

VIEWS - 175 (Abstract) 154 (PDF)

Abstract


This article presents an analysis of Russia’s outward foreign direct investment based on the balance of payments. The country has been affected by the “Dutch disease,” characterized by a heavy reliance on the mining industry and revenues from oil and gas exports. The financial account reveals a consistent outflow of capital from Russia, surpassing inflows. A significant portion of domestic investment goes abroad, often to offshore destinations. This capital outflow has not been fully offset by foreign capital inflows. These findings underscore the challenges faced by Russia in managing its financial position, including the need to address capital outflows, diversify the economy, and reduce dependence on raw material exports. Furthermore, this article aims to identify the presence of Russian capital in OECD countries by comparing data from the Central Bank of Russia and the OECD. The analysis reveals significant discrepancies between the two datasets, primarily due to unavailable or confidential information in the OECD dataset. These variations can also be attributed to differences in methodology and the specific nature of Russian outward direct investments, particularly those involving offshore jurisdictions. As a result, accurately determining the extent of Russian capital in OECD countries based on the available data becomes a challenging task (including for the tourism industry as well).


Keywords


outward FDI; balance of payments; Russia; OECD

Full Text:

PDF


References


Abdulsalam, A., Xu, H., Ameer, W., et al. (2021). Exploration of the Impact of China’s Outward Foreign Direct Investment (FDI) on Economic Growth in Asia and North Africa along the Belt and Road (B&R) Initiative. Sustainability, 13(4), 1623. https://doi.org/10.3390/su13041623

Ameer, W., Xu, H. (2017). The long-run effect of inward and outward foreign direct investment on economic growth: Evidence from developing economies. Review of Innovation and Competitiveness, 3(2), 5–24. https://doi.org/10.32728/ric.2017.32/1

Ameer, W., Sohag, K., Xu, H., et al. (2020). The Impact of OFDI and Institutional Quality on Domestic Capital Formation at the Disaggregated Level: Evidence for Developed and Emerging Countries. Sustainability, 12(9), 3661. https://doi.org/10.3390/su12093661

Ameer, W., Xu, H., Alotaish, M. S. M. (2017). Outward foreign direct investment and domestic investment: Evidence from China. Economic Research-Ekonomska Istraživanja, 30(1), 777–788. https://doi.org/10.1080/1331677x.2017.1314824

Ameer, W., Xu, H., Sohag, K., et al. (2021). Outflow FDI and Domestic Investment: Aggregated and Disaggregated Analysis. Sustainability, 13(13), 7240. https://doi.org/10.3390/su13137240

Bulatov, A. S. (2018). Balance of payments of contemporary Russia: Specificities, management, prospects. Voprosy Ekonomiki, 9, 143–157. https://doi.org/10.32609/0042-8736-2018-9-143-157

CBR. (2023). About Bank of Russia. Available online: https://www.cbr.ru/eng/about_BR/ (accessed on 23 August 2023).

CBR. (2023). Positions by Instrument and Partner Country (Directional Principle). Available online: https://www.cbr.ru/eng/statistics/macro_itm/svs/ (accessed on 23 August 2023).

Center of Strategic Projects. (2018). Reform of currency regulation and currency control in Russia (Russian). Available online: https://www.csr.ru/ru/research/valyutnyj-uchet-no-ne-kontrol/ (accessed on 1 July 2023).

Durani, F., Ameer, W., Saeed Meo, M., & Md Husin, M. (2021). Relationship Between Outward Foreign Direct Investment and Domestic Investment: Evidence from GCC Countries. Asian Economic and Financial Review, 11(4), 278–291. https://doi.org/10.18488/journal.aefr.2021.114.278.291

Frolova, T. A. (2005). World economy (Russian). Available online: http://www.aup.ru/books/m175/3_4.htm (accessed on 15 June 2023).

Gazprom. (2019). Austria. Available online: http://www.gazpromexport.ru/partners/ (accessed on 23 July 2023).

Glaziev, S. Y. (2016). Economy of the future. Does Russia have a chance? (Russian). Moscow: Knijny mir. pp. 385–390

Halwan, M. M., Bin, Z. Y., Ameer, W., et al. (2022). Research Methods in a Multinational Business Environment and Implications for Capital Formation: Application of Cross-Sectional Autoregressive Distributed Lag Methods. Frontiers in Psychology, 13. https://doi.org/10.3389/fpsyg.2022.867891

Hasanat Shah, S., Ameer, W. (2021). The impact of outbound foreign direct investment on export and private investment: Comparative analysis of emerging and developed countries. Australian Economic Papers, 60(4), 674–692. Portico. https://doi.org/10.1111/1467-8454.12225

Kuznetsov, A. V. (2021). Direct Investment from Russia Abroad: Changes since 2018. Herald of the Russian Academy of Sciences, 91(6), 700–707. https://doi.org/10.1134/s1019331621060162

Liuhto, K. (2019). Introduction. Expansion or Exodus: Why Do Russian Corporations Invest Abroad? 1–8. https://doi.org/10.4324/9780203051702-1

Manevitch, V. (2017). Alternative strategies of overcoming stagnation and a “new growth model” of the Russian economy. Voprosy Ekonomiki, 8, 121–137. https://doi.org/10.32609/0042-8736-2017-8-121-137

Mansour A., Musaad H., Zhang Ya B., Ameer W. (2017). The Long-Run Effect of Outward Foreign Direct Investment and Macroeconomic Variables on Domestic Investment: Evidence from World Major Economies Using Panel ARDL Approach. JL Pol’y & Globalization, 63, 39.

Ministry of Economic Development of Russia. (2019a). Overview conditions of economy and major directions of foreign economic activities of Austria in 2017 (Russian). Available online: http://www.ved.gov.ru/exportcountries/economics_review/ (accessed on 26 August 2023).

Ministry of Economic Development of the Russia. (2019b). Overview conditions of economy and major directions of foreign economic activities of the Netherlands in 2017 (Russian). Available online: http://www.ved.gov.ru/exportcountries/economics_review/ (accessed on26 August 2023).

Ministry of Economic Development of the Russia. (2019c). Overview conditions of economy and major directions of foreign economic activities of Switzerland in 2017 (Russian). Available online: http://www.ved.gov.ru/exportcountries/economics_review/ (accessed on26 August 2023).

OECD. (2023). OECD International Direct Investment Statistics 2018, OECD Publishing, Paris. Available online: https://read.oecd-ilibrary.org/finance-and-investment/oecd-international-direct-investment-statistics-2018_bb55ccaf-en#page54 (accessed on 18 July 2023).

OECD. (2023). About. Available online: https://www.oecd.org/about/ (accessed on 18 July 2023).

Ogutu, H., El Archi, Y., Dénes Dávid, L. (2023). Current trends in sustainable organization management: A bibliometric analysis. Oeconomia Copernicana, 14(1), 11–45. https://doi.org/10.24136/oc.2023.001

RBC. (2016). The share of non-oil Russian budget revenues dropped to seven years level (Russian). Available online: https://www.rbc.ru/economics/24/03/2016/56f32a639a794756a61f301e (accessed on 10 June 2023).

Repousis, S., Lois, P., Kougioumtsidis, P. (2019). Foreign direct investments and round tripping between Cyprus and Russia. Journal of Money Laundering Control, 22(3), 442–450. https://doi.org/10.1108/jmlc-08-2018-0054

Shah, S. H., Ameer, W., & Delpachitra, S. (2020). OFDI Impact on Private Investment in the Gulf Economies. Sustainability, 12(11), 4492. https://doi.org/10.3390/su12114492




DOI: https://doi.org/10.24294/jipd.v8i6.3717

Refbacks

  • There are currently no refbacks.


Copyright (c) 2024 Serzhena Tcyrempilova, Can Ertugrul, Mihály Hegedűs, Mohammad Daud Ali, Lóránt Dénes Dávid, Róbert Magda

License URL: https://creativecommons.org/licenses/by/4.0/

This site is licensed under a Creative Commons Attribution 4.0 International License.