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Inward FDI Stock and Growth in Central and Eastern Europe

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  • Lucyna Kornecki

    ()
    (Embry-Riddle Aeronautical University (ERAU), USA)

  • Vedapuri Raghavan

    ()
    (Embry-Riddle Aeronautical University (ERAU), USA)

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    Abstract

    This article analyses the foreign direct investment (FDI) in Central and Eastern Europe (CEE) during the post communist era and tests the hypothesis that FDI contributes to the economic growth of the CEE countries. It reflects macroeconomic changes in post communist CEE and estimates the impact of the FDI stock on economic growth in the CEE using model based on the production function. This paper finds a positive association between FDI and economic growth in the CEE and a tremendous impact of FDI stock on GDP growth.

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    Bibliographic Info

    Article provided by Better Advances Press, Canada in its journal Review of Economics & Finance.

    Volume (Year): 1 (2011)
    Issue (Month): (February)
    Pages: 19-30

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    Handle: RePEc:bap:journl:110102

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    Related research

    Keywords: Foreign direct investment (FDI); Economic growth; Central and Eastern Europe (CEE);

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    References

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    1. Li, Xiaoying & Liu, Xiaming, 2005. "Foreign Direct Investment and Economic Growth: An Increasingly Endogenous Relationship," World Development, Elsevier, Elsevier, vol. 33(3), pages 393-407, March.
    2. Abdur Chowdhury & George Mavrotas, 2006. "FDI and Growth: What Causes What?," The World Economy, Wiley Blackwell, Wiley Blackwell, vol. 29(1), pages 9-19, 01.
    3. Gao, Ting, 2005. "Foreign direct investment and growth under economic integration," Journal of International Economics, Elsevier, Elsevier, vol. 67(1), pages 157-174, September.
    4. Xiaowen Tian & Shuanglin Lin & Vai Io Lo, 2004. "Foreign direct investment and economic performance in transition economies: evidence from China," Post-Communist Economies, Taylor & Francis Journals, Taylor & Francis Journals, vol. 16(4), pages 497-510.
    5. Luiz de Mello, 1997. "Foreign direct investment in developing countries and growth: A selective survey," Journal of Development Studies, Taylor & Francis Journals, Taylor & Francis Journals, vol. 34(1), pages 1-34.
    6. Valentina HARTARSKA & Henry THOMPSON, 2008. "Foreign Investment and Transition in Central/Eastern Europe along the Phase Curve," Applied Econometrics and International Development, Euro-American Association of Economic Development, Euro-American Association of Economic Development, vol. 8(2), pages 67-78.
    7. Luiz R. de Mello Jr., 1997. "Foreign Direct Investment in Developing Countries: A Selective Survey," Studies in Economics, Department of Economics, University of Kent 9701, Department of Economics, University of Kent.
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    Cited by:
    1. Iwasaki, Ichiro & Tokunaga, Masahiro, 2013. "Macroecnomic Impacts of FDI in Transition Economies: A Meta-Study," RRC Working Paper Series, Russian Research Center, Institute of Economic Research, Hitotsubashi University 39, Russian Research Center, Institute of Economic Research, Hitotsubashi University.

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