Interaction between foreign financial services and foreign direct investment in Transition Economies: An empirical analysis with focus on the manufacturing sector
AbstractThis paper studies the nexus between financial and non-financial foreign direct investment in Transition Economies, which are members of the EU. Three questions, which are pointed out in the theoretical literature, are discussed in the paper. We use a dataset for nine Transition Economies over the period 1996–2007, for most regressions we apply GMM and for one regression 2SLS. The empirical results lead to three important statements: non-financial FDI is positively affected by financial services FDI and by market potential. Foreign banks in the EU Transition Economies are mainly driven by non-financial FDI and the capital intensity of a country. FDI crowds out domestic investment in the manufacturing sector.
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Bibliographic InfoArticle provided by Elsevier in its journal Research in Economics.
Volume (Year): 66 (2012)
Issue (Month): 4 ()
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Web page: http://www.elsevier.com/locate/inca/622941
Foreign direct investment; Financial services; Manufacturing sector; Bilateral stocks; Transition Economies;
Other versions of this item:
- Guido Cazzavillan & Krzysztof Olszewski, 2009. "Interaction between foreign financial services and foreign direct investment in Transition Economies: An empirical analysis with focus on the manufacturing sector," Working Papers 2009_22, Department of Economics, University of Venice "Ca' Foscari".
- F21 - International Economics - - International Factor Movements and International Business - - - International Investment; Long-Term Capital Movements
- F3 - International Economics - - International Finance
- O11 - Economic Development, Technological Change, and Growth - - Economic Development - - - Macroeconomic Analyses of Economic Development
- O16 - Economic Development, Technological Change, and Growth - - Economic Development - - - Financial Markets; Saving and Capital Investment; Corporate Finance and Governance
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