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Beyond resource intensity: unveiling the determinants of Russian MNEs’ integration into global value chains
What are the main features of Russian multinational enterprises (MNEs) and how do they integrate in global value chains (GVCs) compared to their global counterparts? The main objective of this work is to unveil the key characteristics of Russian MNEs using firm-level data and placing the findings in the context of the theoretical debate about the role of productivity in outward foreign direct investment (FDI). Contrary to the prevailing belief that Russian MNEs are highly resource intensive with low productivity, our analysis of firm level data from 10,896 domestic firms and MNEs for the period 2010–2019 shows that total factor productivity (TFP) is a significant determinant in the internationalization of these firms. Both the propensity to become multinational and the likelihood of expanding in the global markets are strongly correlated with TFP. We believe that these findings offer a more nuanced perspective about Russian MNEs, contributing valuable insights for both academic and policy considerations.