Does Quality of Business Environment Influence Foreign Direct Investment Inflows? A Case of Central European Countries.

Abstract

This paper investigates the effect of selected business environment indicators on FDI inflows in case of Visegrad countries for the period of 2005-2015. Based on correlation and regression analysis, it is concluded that the business environment matters significantly for FDI inflows, however the direction and strength of dependence differs according to analysed factors. On one hand we found that the better global competitiveness of the country the higher volume of inward FDI the country receives. On the other hand, economically more free country, which is more globalized, with better rating does not attract more FDI inflows, but rather the opposite. As expected, corruption of country is discouraging foreign investors from investing in Visegrad countries.

On the Relationship between Economic Integration, Business Environment and Real Convergence: The Experience of the CEE Countries

“…In the 1990s, numerous publications which demonstrate the relationship between the regulatory environment and the growth of economy, based on Economic Freedom Index, were made (Easton and Walker 1997;Ayal and Karras 1998;Dawson 1998). Business environment and economic growth publications referred to internationalization process, the activity of multinational corporations and the location of foreign direct investment (FDI) (Edrees 2015;Bobenič-Hintošová et al 2016;Wach 2016). The relationship between internationalization at the macro level and the scale of FDI and economic growth in the CEE countries was investigated by Lejko and Bojnec (2011).…”

Business Environment and Economic Growth in the European Union Countries: What Can Be Explained for the Convergence?

“…In this field, the studied areas should be considered through the prism of the internationalisation process, the functioning of multinational corporations, as well as the location of foreign direct investment (Ganni, 2011;Edrees, 2015;Bobenič-Hintošová, Kubíková, & Ručinský, 2016). In recent years, the area of research related to the internationalisation process has been very dynamic, which indicates that the environment is essential for deciding on internationalisation as well as for its development (Belniak, 2015;Lisowska, 2016;Wach, 2016).…”