Foreign Direct Investment as a Factor of Iron and Steel Industry Development in Russia

The research paper defines and describes the factors and the impact of foreign direct investment (FDI) on iron and steel industry enterprises. For this purpose the following objectives have been gradually achieved: 1) Identifying FDI factors, which affect economic performance of iron and steel industry enterprises; 2) Building an econometric regression model for basic iron and steel industry enterprises in Russia on the basis of publicly available information; 3) Interpreting statistical modeling results.The research was carried out using the comparative analysis methods and the methods of summarizing the information gathered from various sources. The authors have conducted a content analysis of recent analytical Russian and foreign keynote publications. In addition, we have completed the analysis of strategic data (panel data), based on which a regression model has been designed. The model has been estimated by Ordinary Least Squares (OLS), where the revenues of iron and steel industry enterprises appeared as a dependent variable and the size of FDI, capital and supplies of enterprises appeared as an explanatory (independent) variable. The following conclusion has been drawn from the present study: foreign direct investment is one of the key components of both the national economic development and the development of iron and steel industry. Foreign direct investment has the most significant positive impact on large metallurgical enterprises, which hold a considerable share of foreign investment. Theses and conclusions presented in the study can be applied by the managers of metallurgical holdings as a theoretical basis for corporate development programs, and by regional authorities and executive powers for identifying the directions of improving investment appeal of the region.