Regional Investment Climate Assessment Based on Business Perception. The Case of Ingushetia

The study presents a new approach to the regional investment climate assessment based on the business perception of key investment climate topics including finance, supply and demand conditions, labor market and institutional framework. The offered approach is tested on data of firm-level survey conducted in the Republic of Ingushetia. This region is associated with a high level of investment risk due to some cases of terrorist activity during the 1990's and the 2000's. In real fact, modern Ingushetia has quite stable criminal situation, and the regional investment climate is similar to other Russian regions. Our empirical research prove that the major investment constraint results from the failure of the state to protect businesses. The two other constraints necessary to consider are difficult access to debt financing and unskilled labor force.