1. The determinants of foreign investment in Russian food industry companies Draft of the paper Student: Gladysheva Anna Group: 41MMAE Argument consultant: Ratnikova T.A. Language consultant: Zinovyeva N.Y.

2. Plan Problem statement Theoretical part o Previous investigation o Idea of this research Empirical part o Comments on the data and model specificities Conclusion o Expected results 2

3. Problem statement Domestic investment Foreign investment Direct Portfolio Others Made by legal entities or individuals entirely owning the enterprise or controlling not less than 10% of shares in its capital 3

4. Problem statement Why food industry? The access to the market with lower barriers Possible long-term perspectives Homogeneity Stability and law probability of technological leaps Independence on certain factors (natural resources) 4

5. Previous investigation Literature review The FDI in food industry The FDI in Russia Determinants of the FDI Food industry in Russia Manaenkov D.A. “What determines the region of location of an FDI project? An empirical assessment” Tullio Buccellato and Francesco Santangelo “Foreign Direct Investments Distribution in the Russian Federation: Do Spatial Effects Matter?” The FDI in Russian food industry 5

6. Theoretical part General model: FDI is a binary variable of the occurrence of the foreign capital in the company Firm is a group of factors on the level of enterprises the figures from the financial statements of the company (assets, liabilities, revenue, net profit, etc.) information on the labour and other resources (number of staff, wage and price on resources, capital intensity, the productivity of labour and capital, etc.) openness of the company (export and import) the position on the market (market share) the administration and some special characteristics (a branch of the industry, the specialisation - whether it has the technology depends more on the row materials, on consumers or on both these factors, etc.) Region is a group of factors on the level of regions of Russia characteristics of the effective demand in the region (the GRP per capita, the population) the openness (export and import, taxes) the market (the coefficients of concentration) the labour force (the number, the level of education, the average wage in the region) the agglomeration (the matrix of the FDI in other regions adjusted to the distances and the FDI in the region of a firm i) the institutes (e.g., corruption, efficiency of laws, taxes) the investment risk and potential (the indexes of the Expert agency) the value added 6

7. Theoretical part Hypotheses The significance of the determinants The importance of regional characteristics The significance of the agglomeration effect. Does it affect as it was explained in theory? The possibility to use the model to predict the probability of the investment in a certain company. The ex-post forecast. 7

8. Empirical part Estimated model: RE Russian Federal Statistic Service Van Dijk data base Expert RA Rating Agency Data sources Panel data Characteristics of Russian food enterprises and regions, where they are situated Data 2005 – 2010, annual data Supposed period According to branches of the industry a specification of the technology and production Geographically According to the level of resource endowment the level of economic development, etc. Samples is distributed as 8

9. Conclusion Expected results The list of variables determine the choice of foreign investor is going to be obtained; The belonging to a certain region (a region with certain characteristics) is supposed to be significant. The agglomeration effect is also expected to be important; Building a model, useful for forecasting the FDI in a firm with known measures is going to be brought into effect. 9

10. THANK YOU FOR YOUR ATTENTION Any questions are welcome 10 Gladysheva Anna, 41MMAE