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Article

Foreign direct investment in a stagnant economy: Recent experience of FDI in manufacturing facilities in Russia

This study presents a snapshot of investment projects in manufacturing that were implemented
by foreign investors in Russia during 2017–2018. We assemble a unique database of all new
plants opened by foreign companies in Russia during 2012–2018 to clarify the distribution of
investment projects implemented during 2017–2018 across industries and territories with
different tax regimes. We also identify the most interesting individual investment projects,
interrelated investment projects, and elements of collective actions. In general, foreign investors
in manufacturing demonstrate high ingenuity in discovering and exploiting the remaining
emerging growing market segments and promising niches in consumer and professional markets
and express significant persistence in realizing investment projects. We also demonstrate the
methods applied to decrease the uncertainty of the project costs by establishing partnerships with
local foreign- and domestically owned companies and the attempts to correct the government’s
decisions and regulatory measures that are uncomfortable for foreign investors.