Takeoff and Turbulence in the Foreign Expansion of Russian Multinational Enterprises

Over a historically brief period (a decade and a half), Russia has become a major outward-investing country on the global stage. According to data from the United Nations Conference on Trade and Development (UNCTAD), Russia’s registered outward foreign direct investment (OFDI) stock increased from US$2 billion in 1993, to US$255 billion in 2007 (UNCTAD 2008), making it the fifteenth most important source economy of investments worldwide, and the second largest among emerging markets, behind Hong Kong (China) only and ahead of Brazil, China, India, and South Africa (figure 8.1). However, the onset of a major financial crisis in the second half of 2008, which affected Russia’s economy significantly, raises questions about the immediate future, as well as the long-term sustainability, of those large outward investments.