Fdi Determinants in the Eurasian Economic Union Countries and Eurasian Economic Integration Effect on Fdi Inflows

Abstract

1 The paper examines the potential determinants of foreign direct investment inflows into the region of Eurasian Economic Union, as well as incentives for investment into other neighboring countries. In the first model, the authors test a hypothesis on country specific foreign direct investment determinants for the Eurasian Economic Union region. The results of fixed effects estimation show that gross domestic product, infrastructure development and secondary education enrollment have a positive statistically significant effect on the foreign direct investment inflows into the region. Conversely, the impact of Customs Union on foreign direct investment appeared to be negative. Furthermore, in the second model of the natural experiment, the authors empirically test the hypothesis on Customs Union's effect on foreign direct investment while controlling for both country and time effects. The model includes evaluating the impact of the policy change on foreign investment inflows. The natural experiment outcome also points to the negative effect of Eurasian economic integration on foreign direct investment inflows. Although the countries of Eurasian Economic

Determinants of Foreign Direct Investment in Developed and Developing Countries: Impact of Political Stability

“…The empirical literature on determinants of foreign direct investment emphasises the significance of macroeconomic indicators, geographical factors and intra-firm indicators. According to macroeconomic factors affecting foreign direct investment attraction, many researchers confirm the impact of openness of FDI-recipient economy [1], inflation rate and labour expenditures [6], government expenditures [7], international trade, considering the volumes of export and import [8], tax rates [9], national innovation development [10], government expenditures for education [11], infrastructural development [12], etc.…”

“…In addition, the profit obtained in the FDI-recipient country is transferred abroad, which can harm the economy. It is worth to note that for many countries foreign direct investment is a possibility to get new technologies, update and promote production capacities, gain methods of effective management and provide wider employment opportunities [1,2]. In terms of developing economies, foreign direct investment is seen as an instrument of successful www.economyofregion.com integration into international economics and value-added manufacturing chains.…”

The Fdi Determinants In Russian Far East: A Panel Analysis

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The determinants of foreign direct investment in Central Asian region: A case study of Tajikistan, Kazakhstan, Kyrgyzstan, Turkmenistan and Uzbekistan (A quantitative analysis using GMM)

“…In this regard there is general consensus among economists that foreign direct investment (FDI) is statistically important in influencing the progress and development of both developing and transition economies (Acaravci and Ozturk, 2012;Mehic et al, 2013). Developments in these recently-independent countries are still ongoing and their governments are doing their best to attract FDI so as to be able to accelerate their development process (Akhmetzaki and Mukhamediyev, 2017). Meanwhile, the economic transition of the five independent countries in the CA region has attracted many international financial institutions and advanced countries such as Russia, China, USA, Japan and some European countries to invest and help drive developmental outcomes in the region (Hill, 2002).…”