Finance: Theory and Practice | 2026
Authors: Lee H.-S.; Kurbatskii A.N.; Nagornyy P.I.
DOI: 10.26794/2587-5671-2026-30-2-198-212
Journal: Finance: Theory and Practice
Year: 2026
Publisher: Financial University under The Government of Russian Federation
Document Type: Article
Open Access: All Open Access; Gold Open Access; Green Open Access
Cited by: 0
This paper examines the effect of replacing Russia’s traditional investment partners with APEC economies on the income growth of Russian regions. The relevance of the study is explained by the fact that the restructuring of Russia’s foreign economic relations has increased the importance of alternative sources of investment and their contribution to regional development. The purpose of the study is to assess how inward and outward foreign direct investment linked to APEC countries influence regional income and wage dynamics, with particular attention to the differences between developed and developing APEC economies. The analysis is based on panel data from Russian regions for the period 2014–2021 and uses econometric methodology, including Fixed Effects models, and One- and Two-step GMM models to estimate the relationship between changes in the structure of foreign direct investment and regional economic performance. The results show that a higher share of inward FDI from APEC countries in total inward FDI to Russia is associated with increased regional income and wages. This positive effect is becomes stronger for inward FDI from developing APEC economies. Outward FDI coming from Russia to APEC countries has no statistically significant effect on regional growth. The study concludes that expanding investment cooperation with developing APEC countries is a more effective strategy to support Russian regional economies during sanctions than relying on developed APEC or non-APEC partners. Its practical significance lies in supporting policies aimed at attracting FDI into priority sectors, especially manufacturing. © Lee H.-S., Kurbatskii A.N., Nagornyy P.I., 2026.
Asia-Pacific; Foreign Direct Investment (FDI); growth theory; Inward Foreign Direct Investment (IFDI); Outward Foreign Direct Investment (OFDI); regional integration; Russia; Western sanctions