Capital Divestments and Outflows by Russian Multinational Corporations.

ILDAR GUZAIROV

Abstract


Regulation of capital divestments and outflow has become very relevant for Russian economic policy. However, such regulation requires real understanding of the geography of Russian foreign direct investment (FDI), which would exclude distortions in official statistics related to taking into account “indirect” FDI through offshore companies. The article is based on empirical material on Russian investments, collected by the author just for this purpose. His information shows the dominance of Greater Europe in the geography of Russian FDI. The regional nature of many Russian multinationals can be explained by several key factors. Among them are the use of FDI to encourage companies to sell their products abroad, the desire of Russian oligarchs to strengthen their bargaining power with the help of foreign investment, and the relative comfort of the business environment in neighboring countries, which is especially important due to the insufficient experience of Russian TNCs in conducting foreign business and weak state support for such investors. The article concludes with a proposal for some measures to regulate the export of FDI in order to diversify the geography of Russian investments abroad. At the preliminary stages of investment projects, Russian TNCs need informational support and institutional support, primarily through bilateral agreements on the protection of investments and the avoidance of double taxation. At the stage of implementing investment projects, the main instrument of state support should be insurance of investment against non-commercial risks.


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ISSN : 2251-1555