The aim of this paper is twofold. First, it is to answer the question of whether Russia is successful in attracting foreign direct investment (FDI). Second, it is to identify partner countries that “overinvest” and “underinvest” in the Russian economy. We do this by calculating potential FDI inflows to Russia and comparing them with actual values. This research is associated with the empirical estimation of factors explaining FDI flows between countries. The methodological foundation used for the research is the gravity model of foreign direct investment. In discussing the pros and cons of different econometric methods of the estimation gravity equation, we conclude that the Poisson pseudo maximum likelihood method with instrumental variables (IV PPML) is one of the best options in our case. Using a database covering about 70% of FDI flows for the period of 2001-2011, we discover the following factors that explain the variance of bilateral FDI flows in the world economy: GDP value of investing country, GDP value of recipient country, distance between countries, remoteness of investor country, remoteness of recipient country, level of institutions development in host country, wage level in host country, membership of two countries in a regional economic union, common official language, common border and colonial relationships between countries in the past. The potential values of FDI inflows are calculated using coefficients of regressors from the econometric model. We discover that the Russian economy performs very well in attracting FDI: the actual FDI inflows exceed potential values by 1.72 times. Large developed countries (France, Germany, UK, Italy) overinvest in the Russian economy, while smaller and less developed countries (Czech Republic, Belarus, Denmark, Ukraine) underinvest in Russia. Countries of Southeast Asia (China, South Korea, Japan) also underinvest in the Russian economy.

<abstract> <p>Over the past few decades, large numbers of literatures in behavior finance have examined firm's internationalization motives, with focused on how host country's risk components affect investment inflow. But the effects of home country risk on investment outflow remain unexamined. Therefore, based on the conceptualization of FDI escapism and the combine frameworks of Dunning's eclectic paradigm and internationalization theory, the objectives of this study are twofold: First, to examine and explain the effects of home country composite risks (which encompasses economic risks, financial risks, political risk) on firms' internationalization motive through outward FDI. Second, to determine which components of home country risk "pushes" firms to initiate the FDI escapism phenomenon in global market. Findings reveal that home country composite risk has moderate adverse effect on investment flow abroad, contributed by both the political and financial risk components, which may give rise to escaping FDI. These findings suggest that firm may initiate outward FDI as a partial escape strategy to address the political and financial challenges in their home country. These results are robust to endogeneity issue and have several substantial implications for policy design to reduce country risks in order to achieve firm's specific objective and government policy goals.</p> </abstract>

Over the last few years, empirical evidence has revealed that technological innovation plays a significant impact in reducing energy consumption and mitigation of carbon emission. But to achieve technological progress toward energy consumption sustainability, depend on several other factors. To this end, this study examines the role of outward foreign direct investment and international trade openness in innovation-energy nexus for 24 OECD countries for the period 1996-2015. To address econometric issues such as cross-sectional dependence, endogeneity, heterogeneity in the panel estimation process, this study employs the Cross-Sectionally Augmented autoregressive Distributed Lags (CS-ARDL), Augmented Mean Group estimator (AMG), and the System Generalized Methods of Moments (SYS-GMM) techniques. Finding reveals that the moderating effects of outward FDI and trade openness in the indirect relationship between technological innovation and energy demand exhibits an inverted U-shape curve. Specifically, this study finds that the impact of technological innovation on energy consumption via reverse technology spillover effect from outward FDI reinforces OECD countries toward energy-saving environmental sustainability both in the short-run and long-run. Furthermore, the joint impact of technological innovation and trade openness on energy demand is negative and statistically significant in the short and long run. This strengthens the efficiency of technologically innovative capabilities of OECD countries to effectively reduce energy consumption. These results are robust to different specifications and consistent across the various estimators, with sets of policy implication discussed.

1 This paper empirically analyses the determinants of foreign direct investment inflows into the Russian regions. This problem has become highly relevant for the necessary modernization of the Russian economy after the recent economic slowdown and sharp decrease in budget revenues. The authors model foreign direct investment flows with the use of the gravity approach according to which investment flows are positively correlated with the size of the investor's country as well as the size of the recipient region and are negatively correlated with the distance between investor and recipient. The empirical analysis is based on a constructed database consisting of the foreign direct investment flows from 179 investor countries into 78 Russian regions for the period 2006-2013. The authors apply the Poisson Pseudo Maximum Likelihood method and identify the following factors determining foreign direct investment inflows into the Russian economy: the gross domestic product of the investor's country, the gross domestic product per capita in the recipient region, the distance from the investor to Moscow, the openness of the region, the economic situation in the region

Numerous studies have examined whether the interrelationship between outward foreign direct investment (OFDI) and international trade are complementary or substitutive. However, one major concern of policymakers is the possibility of OFDI precipitating de-industrialization and jobs losses of domestic economy. This study critically addresses these views by examining the interaction between OFDI and disaggregate international trade based on world bank country income classification which includes, the low income, lower-middle income, upper-middle income, and High income for a panel of 179 countries for the period of 2003 -2019. Based on dynamic panel data model for system-GMM, empirical findings show that OFDI has negative and significant effects on exports and imports of low-income countries, an indication of a substitutional relationship. Regarding the effects of exports on OFDI, and with exception of low-income countries, we found a positive and significant relationship for in all income cluster, an indication of a complementarity relationship. This shows that home country's export is an important facilitator of OFDI. Overall, our empirical results support complementary effects on the dynamic interplay between OFDI and disaggregate international trade, suggesting a greater competitiveness in foreign markets as well as an increase in commercial integration.