On Determinants of Foreign Direct Investment in Transition Economies
On Determinants of Foreign Direct Investment in Transition Economies

Author: Andrzej Baniak

Publisher:

Published: 2016

Total Pages: 28

ISBN-13:

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Foreign direct investment (FDI) brings host countries capital, productive facilities, and technology transfer, as well as new jobs and management expertise. Thus, it is important to understand why in many transition countries FDI inflow is lower than expected. The goal of this study is to explore some important factors determining flow of FDI into transition countries. In particular, we analyze the legal environment for FDI in some transition economies. Then we model the impact of stability of the economic and legal environment on the pattern of FDI. Our analysis shows that (1) higher variability of basic macroeconomic fundamentals reduces the flow of FDI, (2) high volatility of fiscal and business regulations makes the inflow of FDI smaller, and (3) macroeconomic and legal instability leads to adverse selection of the investors. Based on theoretical findings we formulate a clear message to policy makers stating that in order to attract significant inflows of long-term and nonspeculative foreign capital, first of all, a stable economic and institutional environment is needed.

Determinants of Foreign Direct Investment in Transition Economies
Determinants of Foreign Direct Investment in Transition Economies

Author: Merita Zulfiu Alili

Publisher: LAP Lambert Academic Publishing

Published: 2014-05

Total Pages: 88

ISBN-13: 9783659536274

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Using a panel dataset of bilateral flows of foreign direct investment (FDI), we study the determinants of FDI in transition economies, with particular reference to Macedonia's performance. Even though Macedonia has been introducing extensive fiscal and business sector reforms, so far it has been lagged in attracting foreign investment. Following the empirical approach used in previous studies and the theoretical discussion presented in Chapters 2 this study specifies both static and dynamic models. The static models, both fixed and random effects, do not give the best specification. The empirical work confirms the expectation of the positive feedback effect of past FDI onto current FDI. The negative and significant coefficient of distance indicates that FDI is determined by gravity factors. In addition, GDP of the host country, unit labour costs, trade openness, English language are also important determinants of FDI in transition economies. Our suggestion is that the econometric findings on the determinants of FDI in transition economies using small dataset and static models should be accepted only with caution.

Agglomeration and Determinants of Foreign Direct Investment in Transition Economies
Agglomeration and Determinants of Foreign Direct Investment in Transition Economies

Author: Nauro F. Campos

Publisher:

Published: 2014

Total Pages: 0

ISBN-13:

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The objective of this paper is to investigate the determinants of foreign direct investment inflows in the transition economies between 1990 and 1998. The paper brings two innovations. One is the attention to the effect of agglomeration, an issue that has been highlighted recently in the works of Economic Geography. The second innovation is that we look at all transition countries instead of focusing on, for instance, EU candidates. We find that the main determinants of FDI in transition are agglomeration, the quality of the bureaucracy and the quality of infrastructure. We also find an important difference between CEE and CIS countries. The agglomeration effect is greater for CIS countries than in non-CIS countries. For non-CIS countries, education, infrastructure, and quality of bureaucracy are the main attractors. For CIS countries, availability of cheap labor and sufficient infrastructure, and abundance of natural resources are the main factors influencing FDI flows. Also, the further away from Germany, the more FDI CIS countries receive.

Foreign Direct Investment in China
Foreign Direct Investment in China

Author: Yingqi Wei

Publisher: Edward Elgar Publishing

Published: 2001-01-01

Total Pages: 216

ISBN-13: 9781782542544

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'The data used is rich, including national, regional and industry-level statistics.' - Yue Ma, The China Journal 'Wei and Liu provide a comprehensive analysis of the determinants and impact of FDI on the economy of China. The book is to be recommended to students of international business for its elegant use of sophisticated econometric techniques and economic theory in exploring the role of FDI in a major emerging economy that hosts a substantial volume of FDI.' - V.N.Balasubramanyam, Lancaster University, UK China is now among the top hosts for foreign direct investment (FDI) inflows in the world. This fact, combined with recent developments in internationalisation and economic growth in China, ensures a perfect opportunity to identify the determinants and impact of FDI in the largest transition economy in the world.

Outward Foreign Direct Investment and Domestic Investment
Outward Foreign Direct Investment and Domestic Investment

Author: Mr.Ali J Al-Sadiq

Publisher: International Monetary Fund

Published: 2013-02-26

Total Pages: 28

ISBN-13: 1475569122

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Over the past two decades, the growth rate of outward foreign direct investment (FDI) from developing and transition economies has increased significantly. Given the role of physical capital accumulation in determining the economic growth rate, it is important to assess how domestic investment responds to such outflows. This study empirically examines the effects of outward FDI on domestic investment in developing countries. Using data from 121 developing and transition economies over the period 1990–2010, the results suggest that FDI outflows negatively impact the rate of domestic investment.

Foreign Direct Investment in South Asia
Foreign Direct Investment in South Asia

Author: Pravakar Sahoo

Publisher: Springer Science & Business Media

Published: 2013-10-01

Total Pages: 378

ISBN-13: 8132215362

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During the 1990s, the governments of South Asian countries acted as ‘facilitators’ to attract FDI. As a result, the inflow of FDI increased. However, to become an attractive FDI destination as China, Singapore, or Brazil, South Asia has to improve the local conditions of doing business. This book, based on research that blends theory, empirical evidence, and policy, asks and attempts to answer a few core questions relevant to FDI policy in South Asian countries: Which major reforms have succeeded? What are the factors that influence FDI inflows? What has been the impact of FDI on macroeconomic performance? Which policy priorities/reforms needed to boost FDI are pending? These questions and answers should interest policy makers, academics, and all those interested in FDI in the South Asian region and in India, Pakistan, Bangladesh, Sri Lanka and Pakistan.