ABSTRACT
This chapter addresses external determinants of economic growth in Russia, including foreign capital. In order to do so, this chapter considers foreign direct investment, portfolio investment, and net direct and portfolio investment in the Russian economy. This chapter addresses the issue of whether the volume of direct and portfolio investments may have a significant impact on the Russian economy. This study investigates the balance between direct and portfolio investment inflows and outflows. This chapter investigates whether financial resources flowing in the national economy may be one of the major external determinants for overcoming the poverty trap and initiating and sustaining economic growth in Russia. This would follow from the classical poverty trap theory, considered, revised, tested, and applied in this study. Foreign direct investment and foreign portfolio investment are the two distinct forms of financial resources that come to the national economy from abroad. In addition to inward direct investment and inward portfolio investment coming to the Russian economy, this study considers outward direct investment and outward portfolio investment. This chapter determines that when it comes to foreign investment and financial flows in general, the Russian economy is a donor, not a recipient.
