Foreign Direct Investment in Central and Eastern European Countries: A Dynamic Panel Analysis

Carstensen, Kai und Toubal, Farid (2003): Foreign Direct Investment in Central and Eastern European Countries: A Dynamic Panel Analysis. Kieler Arbeitspapiere,

Abstract

This paper uses dynamic panel data methods to examine the determinants of Foreign Direct Investment (FDI) into Central and Eastern European Countries (CEECs). Our empirical model shows that the traditional determinants, such as market potential, low relative unit labor costs, a skilled workforce and relative endowments have significant and plausible effects. In addition, transition-specific factors such as the level and method of privatisation, and the country risk, play an important role in determining the flows of FDI into the CEECs and help explain the different attractiveness for FDI of the individual countries.

• Item Type: Paper
• Faculties: Economics; Economics > Chairs > CESifo-Professorship for Business Cycle Analysis and Surveys (closed)
• Subjects: 300 Social sciences > 330 Economics
• JEL Classification: F21, F23, P33
• Language: English