Modernization of the Russian economy demands large financial and technological inputs. However, despite the fact that Russia managed to accumulate wealth during years of rapid growth in the first half of 2000`s it is still not enough in comparison wit...
Modernization of the Russian economy demands large financial and technological inputs. However, despite the fact that Russia managed to accumulate wealth during years of rapid growth in the first half of 2000`s it is still not enough in comparison with the needs. Also, being a nation with high level of fundamental technology development, Russia experiences problems with innovations for mass production that are at the core of industrial competitiveness of nations. In this regard Foreign Direct Investments can play a very important role as a transmitter of finance and technologies and positively influence an overall modernization process. However, increase in FDI inflow did not produce any significant impact on the desired transformation of the Russian economy and was limited to some industries and individual companies. Investors in Russia tend to seek rent and thus put money into extracting industries and trade where profits are made faster. Most foreign companies are very cautious about long-term investments. Korean companies exhibit a slightly different pattern of behavior. They operate in those industries that are of high importance for the modernization. Nevertheless, they are only a small fraction of total investments. Besides, main Korean players are already present in Russia.