ABSTRACT

This chapter analyses Russia's business environment whilst evaluating the different factors that have shaped this environment. The discussion starts with an analysis of foreign investment, including foreign direct investment (FDI) trends, and goes on to attempt an explanation for the current investment climate. Institutional arrangements play a paramount role here and a legacy of formal and informal institutions from the Soviet era deserves a special mention. The situation in contemporary Russia is not uniform for the various economic actors: the business environment is more favourable for larger enterprises and business groups, and less so for small and medium sized enterprises (SMEs), de novo companies and foreign investors. Apart from general issues applicable across Russia, regional differences also play their part in determining the attractiveness of the business environment.