The first-ever survey conducted by SKOLKOVO Moscow School of Management and the Columbia Program on International Investment (CPII) in New York of Russian multinational enterprises (MNEs), released today, reveals a dramatic transnationalization of Russian firms.
Its principal findings include Russia’s Top 25 MNEs – ranked by foreign assets – have US$59bn assets abroad (table 1), have nearly US$200bn in foreign sales (including exports) and employ 130,000 persons abroad. Foreign assets, sales, and employment each have more than doubled since 2004. Foreign assets are concentrated in Europe. Four oil/gas firms, led by Lukoil and Gazprom, and nine metals/mining firms, led by Severstal and Rusal, together account for 78% of the total foreign assets of the Top 25.
The Top 25 have played a key role in making Russia the third largest outward investor among emerging markets in 2006 in terms of foreign direct investment (FDI) outflows and the second largest in terms of outward FDI stock. Like their competitors from other countries, Russian firms invest abroad to acquire a portfolio of locational assets, which are increasingly important as a source of their international competitiveness.
“Russian companies started to establish foreign affiliates much later than their competitors”, notes Valery Sorokin, Director of the SKOLKOVO Research Centre. “However, the top multinationals are quickly expanding their role – with all the accompanying risks, opportunities and new requirements both for their business and economic policy.”
SKOLKOVO Moscow School of Management, an innovative business school founded by 14 major companies and private individuals, and the Columbia Program on International Investment, a joint Columbia Law School Earth Institute venture at Columbia University, collaborated on the ranking of Russian MNEs. This exercise is part of a global effort to rank emerging market MNEs.