Factor of Investment Non-Attractiveness of Russia and Motives of Foreign Investors

8th India Investment Conference Growth Conundrum, Opportunities and Threats in 2018, Mumbai, 12 January 2018

Posted: 30 Jan 2018

See all articles by Mariia Rubtcova

Mariia Rubtcova

North- West Institute of Management-branch of RANEPA

Oleg Pavenkov

Russian Academy of National Economy and Public Administration under the President of the Russian Federation (RANEPA) - Moscow Campus

Date Written: January 21, 2018

Abstract

The article is devoted to analysis of problem of investment prospects of Russia. Russia is not the most profitable country to start business to manufacture products and to export it.

It is caused by the following factors of investment non-attractiveness of Russia:

1. despite relatively cheap labor, labor productivity is on low level;

2. it's hard to find a good manager;

3. it is quite expensive to start business in Russia;

4. imperfection of Russia's law system especially regarding regulation of business sphere;

5. political and economic instability and excessive regulation;

6. traditionally high volatility in the economic environment;

7. high in comparison with Arabic countries and Singapore tax burden;

8. problems in establishing clear property rights (in case large objects);

9. not-high level of citizens' income;

10. difficulties in communication with government and privatization organizations;

11. imperfection of material, especially transport and logistics, infrastructure.

For transnational companies, such factors as market capacity and growth rate are important. We made the conclusion that main motives of foreign investors in the Russian market are the following:

1. the search for new markets with a large growth potential;

2. the search for resources;

3. the efficiency of the existing business in the country.

Suggested Citation

Rubtcova, Mariia and Pavenkov, Oleg, Factor of Investment Non-Attractiveness of Russia and Motives of Foreign Investors (January 21, 2018). 8th India Investment Conference Growth Conundrum, Opportunities and Threats in 2018, Mumbai, 12 January 2018, Available at SSRN: https://ssrn.com/abstract=3106377

Mariia Rubtcova (Contact Author)

North- West Institute of Management-branch of RANEPA ( email )

St.Petersburg
Russia

Oleg Pavenkov

Russian Academy of National Economy and Public Administration under the President of the Russian Federation (RANEPA) - Moscow Campus ( email )

Moscow, 119571
Russia

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