Do Formal Institutions Really Matter for Foreign Direct Investments to the Russian Federation? The Case of FDI Flows from the European Union to Russia

Introduction Being proponents of institutional theory, we endeavor to use its key ideas to analyze investment cooperation between the Russian Federation (RF) and the European Union (EU). Our chapter specifically covers foreign direct investments (FDI) from the EU to Russia. EU companies have long experience investing in the country. Indeed, the first substantial FDI projects took place already in the nineteenth century. Businessmen from Belgium, Germany, Sweden, and other European countries were quite active in exploring opportunities arising from the country’s industrialization and need for infrastructure development (telegraph, telephone, tram lines, electrification, etc.).