Russian MNCS and international investment paradigm (Before COVID-19)

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

Article ID: 3725
Vol 8, Issue 6, 2024

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Abstract


This study examines the relationship between Russian FDI carried out by large MNCs and investment development path (IDP). Although statistical analysis does not establish a significant relationship between outward FDI and GDP, the behavior of Russian outward FDI contradicts traditional models. Two primary factors contribute to this paradox. First, the complex business environment in Russia, characterized by a combination of both improvements and contradictions, has a significant impact on outward FDI behavior. Secondly, the duality of the Russian economy and society plays a decisive role. This segment resembles a high-income country with ample resources, while most face lower income levels, raising concerns about wealth distribution. Historical factors, including Russia’s transition from a state-controlled to a market-oriented economy, contribute to the internationalization of Russian MNCs. Both state-owned enterprises and privatized firms are influenced by the state, although to varying degrees. Government involvement in international business strategies increases the knowledge and experience of Russian MNCs, but also raises concerns about political influence.


Keywords


foreign direct investment; investment development path; Russian MNCs

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DOI: https://doi.org/10.24294/jipd.v8i6.3725

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