Suchergebnisse

The aim of this study is to examine the place of the Baltic States on the corporate world map, a contemporary, foreign-investment-driven alternative to the more familiar political map. To this end, the author studies the geographical place of the Baltics in the documentation of transnational corporations. The research database consists of financial reports and presentations of 60 leading European (including Russian) transnational corporations. Special attention is paid to companies from countries with significant FDI stock in the Baltic States. This study is a first step towards analyzing international investors' interpretation of the new European borders. The connection between the neighborhood effect on FDI distribution and geographical segmentation in the corporate paperwork is established. Some companies use a multilevel division (e. g. Europe/Eastern Europe), where the Baltics is usually associated with "Europe" (with or without Russia and Turkey). However, in some cases the Baltic States are clustered under "home market" (as is the case with some Swedish companies), "former Soviet Union" (some Russian companies), "Northern Europe and Central Asia," and even "Middle East and Eastern Europe." Varying understanding of where exactly the borders of Europe lie could explain the plurality of attitudes of the European business establishment to the EU sanctions against Russia.

Russia is potentially an attractive host economy for foreign direct investment (FDI), mainly due to its large market and rich natural resources. The Government has, however, been unable to make the radical changes needed in the country's investment climate for attracting FDI on a scale and to a range of industries in line with Russia's potential. Nevertheless, oil and gas, power generation and motor vehicles industries, as well as wholesale and retail trade and several other industries have recently received new and significant FDI. After a steep decline in 2008, inward FDI (IFDI) stock recovered, to reach US$ 491 billion in 2010, although there was a moderate fall again in 2011. IFDI flows fell considerably in 2009 but rose to US$43 billion in 2010 and US$ 53 billion in 2011. In 2008–2010, the largest number of significant greenfield projects were in power generation. Large mergers and acquisitions (M&As) took place in various industries, but the size of the largest deals was usually smaller in 2010 than in 2008 and 2009. High levels of corruption, lack of competition and a distorted dialogue between the state, business and society are main barriers to the rapid growth of inward FDI. The recent global financial and economic crisis has revealed weaknesses of the Russian model of development in the 2000s. It is doubtful whether the efforts currently under way by the Russian Government to "repair" the existing model without political and economic reforms will lead toward a major improvement of the investment climate as only slight changes are being made (e. g., the improvement of the Russian migration regime and the development of special economic zones). However, the federal elections in 2012 could lead to more efficient steps, although it is difficult to predict the scale of probable positive shifts in the investment climate.