Foreign direct investment inflow dynamics: The case of central and eastern Europe

Artikel

This study investigates the dynamics of foreign direct investment (FDI) inflows into Central and Eastern European countries (CEECs) using panel data (1994-2020) analysis methods such as fixed effects, fully modified ordinary least squares (FMOLS) and random effects. Specifically, the study examined what factors could account for the mixed pattern of FDI inflows into CEECs. The mixed results from the existing empirical literature on FDI inflow dynamics triggered the undertaking of this study to contribute to the ongoing debate on the subject. The study notes that infrastructural development, economic growth and domestic investment had a significant positive influence on FDI across all three panel data analysis methods. Other variables that were found to have had a significant positive effect on FDI include (1) complementarity between infrastructural and financial development (fixed effects, random effects), (2) trade openness (fixed effects) and (3) savings (random effects, FMOLS). A significant negative impact of the exchange rate on FDI was observed under the FMOLS. CEECs are therefore urged to implement policies to increase infrastructural development, financial development, trade openness and savings to enhance the inflow of FDI. Future studies should investigate the minimum threshold levels of the explanatory variables of FDI.

Object Details

• Language: Englisch

References and Relationships

• Bibliographic citation: Journal: Comparative Economic Research. Central and Eastern Europe ; ISSN: 2082-6737 ; Volume: 26 ; Year: 2023 ; Issue: 1 ; Pages: 45-63

Classification and Topics

• Classification: Wirtschaft ; Single Equation Models; Single Variables: Panel Data Models; Spatio-temporal Models ; Multiple or Simultaneous Equation Models: Panel Data Models; Spatio-temporal Models ; International Investment; Long-term Capital Movements ; Economic History: Government, War, Law, International Relations, and Regulation: Europe: 1913-
• Subject: foreign direct investment ; Central and Eastern Europe ; panel data

Contributors, Places and Time

• Event: Geistige Schöpfung
• (who): Tsaurai, Kunofiwa
• Event: Veröffentlichung
• (who): Lodz University Press
• (where): Lodz
• (when): 2023

Further information

• DOI: doi:10.18778/1508-2008.26.03
• Last update: 10.03.2025, 11:43 AM CET