Assessing Horizontal and Vertical Spillover Effects from Foreign Direct Investment in Russia

FDI is believed to be very helpful for the national economy's development. It is expected to increase the profitability and productivity of domestic companies. The analysis of balance sheets of Russian enterprises shows that for the period 2004-2012 foreign investment caused horizontal and vertical spillovers in economic sectors. But this impact is ambiguous. Econometric modeling establishes the significant positive role of backward spillover. This means that national suppliers gain benefits from international interaction and become more effective due to technological and knowledge inflow from abroad.