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Seminar paper from the year 2006 in the subject Economics - Case Scenarios, grade: A-, , language: English, abstract: Foreign direct investment constitutes a highly important part of contemporary world economy. Globalization of international economic relations have led to the situation in which many countries face the necessity to compete with each other and, thus, to enhance their competitiveness through attraction of foreign capital. FDI in this respect appears to be the most desirable option for many economies, as they are more stable than other forms of investment.This papers answers the question of why Russia attracted such a small amount of FDI since the beginning of the transition process. This analysis takes into consideration major determinants of FDI inflow to the country as well as factors of their spatial and sectoral distribution within the state.