The Impact Of China's Direct Investment On Technological Innovation Of Russian Enterprises

Russia has always been one of the major foreign direct investment recipients among developing countries.However,some factors make it difficult for foreign investors to clearly understand the actual situation and make decisions on investing in the Russian economy.Due to recent events in the geopolitical arena,the status of the country has become unstable,forcing Russia to change its cooperation with the East.China ranks fourth in the list of major countries-Russia's economic investors.Its main interest is in natural resources and consumer sectors.As Russia's main strategic partner in East Asia,China is a potential major investor in the Russian economy.The current phase of the development of Sino-Russian investment cooperation is characterized by rapid growth and has received the support of the leaders of the two countries.This paper mainly analyzes the mechanism and effect of China's foreign direct investment on the technological innovation of Russian companies.The current empirical evidence also lacks research on the spillover effects of FDI in Russian countries.This thesis carries out the following research directions.First,it analyzes the actual situation of Russia's FDI and the potential impact on Russia's state-owned enterprises' technological innovation;explains the parameters and influencing factors of foreign direct investment,and the influence of these factors on the overall number and distribution of foreign direct investment in Russia,especially the share of Chinese foreign investment in Russian companies.We suppose that such factors as restrictive policies,low investment attractiveness,opaque financial data,political instability and high investment risk are major constraints for Chinese investors.In addition,we build an index system of China's FDI,patents,number of employees,R&D expenditures,and sales revenue,and propose to use Cobb-Douglas test and fixed panel data estimation to conduct econometric analysis,thus discovers that Russia's FDI is a technological innovation impact.Considering political and economic reasons,and facilitating observation of several periods at the same time,panel data of 120 large and medium-sized Russian companies from 2010 to 2016 are used.Finally,we conduct an empirical research to analyze the influencing factors of foreign direct investment in Russia and evaluated the technological innovation capabilities of Russian companies.The results show that foreign direct investment in China has a positive impact on the technological innovation of Russian companies,however the effect is not very high,but overall it has been found that regional factors have a significant impact on China's FDI distribution.The study of this dissertation will contribute to the formulation of long-term foreign direct investment policy,especially to encourage investment in low-yield industries.And based on the empirical results,it put forward policy recommendations,which will help China and Russia to formulate optimization policies.