EUROPEAN INVESTMENT IN KALUGA REGION: FEATURES UNDER SANCTIONS

The article examines the inflow of European investment to Kaluga region, one of the most successful in Central Federal District of Russia. The authors identify the specifics of the regional location of European direct investment (FDI) in Russia before and after imposition of Western sanctions in mid-2014 using the existing theories of consistent pattern and different factors influencing this distribution. One of the most important factor consist in that the European Union represents an integration association where each country has its national interests and priorities and particular business model. This explains the differences between EU members in regional and branches preferences in investing in Russia. The article analyses investment attractiveness and advantages of Kaluga region which worked out an effective Investment Strategy 20132020 based on "soft" drivers and cluster model of economy. Special investment product of the region are productive sites ('brownfield" and "greenfield") set up in industrial parks and special economic zones. The main cornerstones of the strategy are successful activities of local government and favorable conditions for European investors. The economic crisis and sanction against Russia has not affected seriously the participation of major European investors due to successful and clever policy of region authorities. No one abandoned their project plans. Authors pay special attention to the advantages of Kaluga region cluster model for European investors and their concentration in manufacturing industries, including high-tech and innovative production. The branches' structure of European investment reflects cluster orientation of region's economy. Western Europe remains the top investor in the region. The largest number of FDI projects is implemented by German companies.