The Motives and Impediments to FDI in the CIS

Malgorzata Jakubiak and Alina Kudina
Authors registered in the RePEc Author Service: Malgorzata McKenzie

No 370, CASE Network Studies and Analyses from CASE-Center for Social and Economic Research

Abstract: This paper examines the motives behind foreign direct investment (FDI) in a group of four CIS countries (Ukraine, Moldova, Georgia and Kyrgyzstan) based on a survey of 120 enterprises. The results indicate that non-oil multi-national enterprises (MNEs) are predominantly oriented at serving local markets. Most MNEs in the CIS operate as 'isolated players', maintaining strong links to their parent companies, while minimally cooperating with local CIS firms. The surveyed firms secure the majority of supplies from international sources. For this reason, the possibility for spillovers arising from cooperation with foreign-owned firms in the CIS is rather low at this time. The lack of efficiency-seeking investment poses further concern regarding the nature of FDI in the region. The most significant problems identified in the daily operations of the surveyed foreign firms are: the volatility of the political and economic environment, the ambiguity of the legal system and the high levels of corruption.

Keywords: FDI; CIS; industrial organization; investment motives (search for similar items in EconPapers)
JEL-codes: F21 F23 L22 M15 (search for similar items in EconPapers)
Pages: 31 Pages
Date: 2008
References: Add references at CitEc
Citations: View citations in EconPapers (12)

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