Alina Kudina and Malgorzata Jakubiak surveying 120 MNEs to find out the motives and impediments to FDI in the CIS

In The Motives and Impediments to FDI in the CIS, Alina Kudina and Malgorzata Jakubiak, two CASE affiliated researchers, investigates the motivations of foreign-owned companies to invest in non-oil economies of the Commonwealth of Independent States, most particularly in Ukraine, Moldova, Georgia and Kyrgyzstan on the basis of three types of incentives: market-seeking, resource-seeking and efficiency-seeking.

Market-seeking clearly stands out as the primary reason to invest in the CIS, meaning that the 120 multi-national enterprises (MNEs) surveyed showed a predominant orientation at serving local markets  or supplying existing products to the host country and the region.  The study identifies skilled labour and low-cost input factors (resource-seeking) as the second most important motive, while the access to the host country's research and technological expertise ranked the lowest, suggesting that investors do not yet seek efficiency in the CIS.  

The most significant problems identified in the daily operations of the surveyed foreign firms are: the volatility of the political and economic environment, the ambiguity of the legal system and the high level of corruption.

[CASE Network Study and Analysis No. 370: The Motives and Impediments to FDI in the CIS]