Unrealized opportunities: Exploring Russia’s untapped OFDI potentials amidst economic sanctions

The economic sanctions imposed by the United States, Europe, and other countries since 2014 have heightened unpredictability turbulence in business environment for Russian firms, necessitating exploration of new international partners transformation relationships. This paper aims to examine redirection outward foreign­ direct investment (OFDI) context these sanctions, particularly those intensified 2022. analysis employs an estimated econometric model compare actual potential levels OFDI, utilizing a comprehensive database covering 74 origin 102 destination from 2010 2019. estimation technique Poisson pseudo-maximum likelihood approaches. findings indicate that firms demonstrated underinvestment most regions, except Northern Western during examined period. resulted significant decline OFDI imposing while there was increase Asia, Middle East, CIS countries. As anticipated, 2022 exerted additional pressure on leading further shift their outflows towards Asia which, however, could not compensate sharp EU North America. results highlight existence untapped Russia African Latin American as well East. These regions emerge desirable bilateral liberalization. From policy perspective, emphasize importance Federation pursue deep trade agreements encompass preferences, public procurement, protection intellectual property rights with harboring OFDI. Additionally, expanding government support domestic venturing abroad is crucial sustain enhance integration into global economy, especially face sanctions.