Institutional Development as a Determinant of FDI Attractiveness in Southeast Europe

Abstract

) and its importance in attracting FDI inflows. Several regression models are created to determine the significance of chosen location determinants. The models include institutional variables about the transition progress, government effectiveness, rule of law, corruption, but also variables about the economic characteristics of the SEE region such as GDP per capita, growth rate, inflation and wages. The results of the panel data analysis indicated the importance of economic determinants (GDP p.c. and inflation) to FDI inflows, while among institutional factors, only corruption, large scale privatisation, the development of trade and forex systems, and overall infrastructure reform have a significant impact on FDI inflows. Property rights freedom and small scale privatisation are not significant variables. When we reduce multicollinearity, we conclude that GDP p.c., inflation, the trade and forex systems, corruption and overall infrastructure reform remain significant variables in explaining the economic and institutional determinants of FDI inflows.

Corporate social responsibility in emerging and developing economies in Central and Eastern Europe – a measurement model from the stakeholder theory perspective

“…While the FEM capture country-specific effects with α i , which do not change over time, the REM incorporates heterogeneity among the countries by including a specific unobservable effect u it in the error term. All models were tested using the Hausman test to decide between REM and FEM and standard errors that are robust to heteroscedasticity and autocorrelation (Kersan-Skabic, 2013). The use of these methods was justified as it ensures statistically superior results compared with the Pearson correlation method.…”

Sustainability of merchandise trade flows between Croatia and other EU member states: Panel cointegration approach

“…Bakker and Christoph Klingen (2012) noted that bank lending, often funded by foreign parent banks and directed to finance real estate and non-tradable sectors, has been found to be unsustainable. Radmila Jovančević (2007) and Ines Kersan-Škabić (2013) noted that the large portion of the foreign capital was directed toward financial institutions; Table 6 in the Appendix confirms these points. Figure 1 and Figure 2 in the Appendix illustrates development of the Croatian external debt.…”

Determinants of Foreign Direct Investment: A Review

“…Although the name of this factor for each study differs, all investigations refer to Gross Domestic Product, either it is called Market size (Mateev, 2009;Riedl, 2010;Sharma & Bandara, 2010;Khachoo & Khan, 2012), Economic size (Tang, 2011), The size of the economy (Jurcau et al, 2011), Size of domestic market (Arbatli, 2011), or directly GDP (Hayakawa et al, 2013;Kersan-skabic, 2013). Nevertheless, the methodology is different, as for example: Sharma & Bandara (2010) and Riedl (2010) apply the level of GDP in currency units, Mateev (2009) and Kersan-Skabic (2013) use GDP per capita, other researchers use the logarithm of GDP (Tang, 2011;Jurcau et al, 2011).…”