Analysis of Relation between Capital Intensive Sectors and Direct Foreign Investments

Dmitry E. Kuznetsov – Researcher of the Russian Presidential Academy of National Economy and Public Administration (Moscow, Russia). E-mail: This email address is being protected from spambots. You need JavaScript enabled to view it.

The article demonstrates that foreign investors are better represented in the capital-intensive sectors of the manufacturing industry. This finding contradicts a rather widespread view on direct foreign investments as a way to move labor-intensive production stages to the countries with cheap labor force. However, this correlates with Pol Antras 2003 hypothesis on the choice of borders made by international companies within global value chains.

Key words: direct foreign investments, capital-intensive, manufacturing industry, micro data, RUSLANA.