This paper aims to estimate the impact of institutional quality on the firms' location choice in the Russian regions. We use data from three sources: the Federal State Statistics Service (Rosstat), the International Center for the Study of Institutions and Development (ICSID), and the ranking agency 'Expert RA' over the period 2006-2014. Based on the panel data model, our study confirms that institutional quality substantially and positively affects enterprise location choice in a region. In particular, the investment potential is important for attracting firms into a region, while investment risk negatively affects firms' location choice. These results emphasise that improvement of the institutional environment in Russian regions is essential for business development.