FDI and Long-term Economic Growth in Russia

TAGANOV, BORIS (2014): FDI and Long-term Economic Growth in Russia.

Abstract

In this paper we consider relationship between foreign direct investment (as one of the mechanisms of technological development) and long-term economic growth. In the beginning we discuss the role of FDI in the increase of total factor productivity from the viewpoint of endogenous growth theory. We then turn to the comparative analysis of FDI inflow to Russia and other countries broken down by economic industries. We find that Russian industries capable of increasing TFP and positively impacting the long-term economic growth are significantly underinvested relative to other countries. Since, in our opinion, pre-existing sources of Russia’s economic growth are almost completely exhausted, we suggest several economic policy measures aimed at attracting FDI in Russia and improve the absorptive capacity of the country.

• Item Type: MPRA Paper
• Language: English
• Keywords: FDI, TFP, economic growth, human capital, economic policy
• Subjects: E - Macroeconomics and Monetary Economics > E6 - Macroeconomic Policy, Macroeconomic Aspects of Public Finance, and General Outlook > E66 - General Outlook and Conditions; F - International Economics > F2 - International Factor Movements and International Business > F21 - International Investment ; Long-Term Capital Movements; O - Economic Development, Innovation, Technological Change, and Growth > O1 - Economic Development > O15 - Human Resources ; Human Development ; Income Distribution ; Migration; O - Economic Development, Innovation, Technological Change, and Growth > O4 - Economic Growth and Aggregate Productivity > O43 - Institutions and Growth

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