The Role of IPAs in Transition Countries in Attracting FDI

It is widely acknowledged that FDI plays a significant role in economic development worldwide. FDI brings to the host country not only capital inflows, but also modern technology and know-how. By recognizing the advantages of FDI to the host economy, governments in many developing and transition countries have established IPAs on both national and sub-national levels. This study investigated the role of IPAs in transition economies in attracting FDI. The research focused on Dutch FDI in Russia. The study evaluated the promotional strategies of Russian IPAs to identify their role in attracting Dutch FDI. The research data were collected from the interviews with the consultants to Dutch MNEs and the web survey of major Russian IPAs. Based on the findings, it was identified that Russian IPAs act as the intermediaries of FDI flows between the host country and foreign investors rather than as one of the determinants of FDI. The same conclusion was applied to the role of IPAs in transition economies in attracting FDI.