Considering Russia For New Business
August 18, 2010 3 Comments
Russia has many natural resources with oil and gas are at the top of the list (Ledyaeva, 2009). Most of the goods produced in Russia would be approximately close to European market. Ledyaeva (2009) warns that the legislation and political risk in Russia had increased since 1998. Geinberg (2008) explain that Russia had good natural resource that made the Russian government accumulate enough cash to invest in the available opportunities. Foreign investors are shying away from Russia because of the their growing concern that their investments could be seized by the government (Grinberg, 2008). Czech Republic would be a better place for your investment because of its association with the EU. Czech Republic would had lower labor cost and is open for trade but need the capital investment (Janicki & Wunnava, 2004). Kraftova (2005) state that the most promising countries for investment that joined the European Union is the Czech Republic. The rate of youth in the age of 20-24 with secondary education is high, the employment of women is more than 50%.
The Czech Republic would need to increase its labor productivity because it has productivity lower by %40 than the EU countries (Kraftová, 2005). The Czech Republic need to spend more on the research and development because its research and development effort is lagging behind the EU countries (Kraftová, 2005). New opportunities would be discovered during the research and development work which will benefit. The local governments workforce life time education for the people in the age between 25-64 is lower than EU countries because Czech has %6.3 when EU had %9.5. Czech Republic is part of the EU which is a complex and creative cooperative system of 25 different cultures. This mix would consider the Czech Republic as a potential site for investment if the above points were mitigated (Kraftová, 2005).
Grinberg, M. (2008). Oil and power politics. Risk Management (00355593), 57-57.
Janicki, H. P., & Wunnava, P. V. (2004). Determinants of foreign direct investment: empirical evidence from EU accession candidates. Applied Economics, 36(5), 505-509. doi: 10.1080/00036840410001682214
Ledyaeva, S. (2009). Spatial econometric analysis of foreign direct investment determinants in Russian regions. World Economy, 32(4), 643-666. doi: 10.1111/j.1467-9701.2008.01145.x
Kraftová, I. (2005). Investing in the Czech Republic. Journal of Corporate Accounting & Finance (Wiley), 16(6), 39-45.