Determinants Of Foreign Direct Investment In Ceecs: The Role Of Financial Stability
AbstractThe globalization process has an important impact on the foreign direct investment flows. The FDI are increasingly important to developing countries, such as the Central and Eastern European countries. The EU accession has stimulated the investors’ confidence, and it has contributed to their economic development. According to the economic theory, the factors influencing the FDI are numerous and related to the country, sector and company’s characteristics. One classification groups these factors in three broad categories: economic policy of host country, economic performance and attractiveness of na-tional economy. In this paper, we point out a new FDI determinant: financial stability. The financial system stability represents an attractive factor for the foreign investors and can be considered as a FDI determinant, alongside the categories mentioned above. Using a large sample of Central and Eastern European countries and panel data techniques, we investigate the impact of the financial stability on the FDI flows. The financial stability’s measure is based on a financial stability aggregate index and we use as control variables the number of inhabi-tants, the trade openness, the labor productivity, and the landing rate. The results show that the stability of the financial systems played a significant role in attracting FDI inflows in Central and Eastern Europe during the 1998-2008 period.
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Bibliographic InfoArticle provided by Alexandru Ioan Cuza University, Faculty of Economics and Business Administration in its journal Analele Stiintifice ale Universitatii "Alexandru Ioan Cuza" din Iasi.
Volume (Year): 2010SE (2010)
Issue (Month): (july)
Contact details of provider:
Postal: Universitatea Al. I. Cuza; B-dul Carol I nr. 22; Iasi
Phone: 004 0232 201070
Fax: 004 0232 217000
Web page: http://anale.feaa.uaic.ro/anale/
More information through EDIRC
foreign direct investment; financial stability; Central and Eastern European countries;
Find related papers by JEL classification:
- G11 - Financial Economics - - General Financial Markets - - - Portfolio Choice; Investment Decisions
- G24 - Financial Economics - - Financial Institutions and Services - - - Investment Banking; Venture Capital; Brokerage
- O16 - Economic Development, Technological Change, and Growth - - Economic Development - - - Financial Markets; Saving and Capital Investment; Corporate Finance and Governance
- P33 - Economic Systems - - Socialist Institutions and Their Transitions - - - International Trade, Finance, Investment, Relations, and Aid
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