Does Foreign Ownership Matter? Russian Experience

Abstract

The purpose of the paper is two-fold. The paper compares productivity of Russian firms that received foreign direct investments, and fully domestically owned firms. It also analyses spillovers from foreign-owned firs. At the same time, there are positive spillovers between foreign-owned and domestic firms. This effect if particularly strong in the case of medium-sized firms (between 200 and 1000 employees), while spillovers on small firms are negative. The stock of human capital in the region is one of the main factors, which helps domestic firms to benefit from the entry of foreign firms.

Keywords: foreign direct investment, spillovers

JEL Classification: F2, O3