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Determinants of Foreign Direct Investments in Transition Economies: Case of Commonwealth of Independent Countries

Author

Listed:
  • Sobir Shukurov

    (Department of Foundations of Economics and Governance, Tashkent State University of Law, Uzbekistan)

  • Mansoor Maitah

    (Department of Economics, Faculty of Economics and Management, Czech University of Life Sciences Prague, Czech Republic)

  • Luboš Smutka

    (Faculty of Economics and Management, Czech University of Life Sciences Prague, Kamýcká 129, 16 521 Prague 6, Czech Republic)

Abstract

While there has been voluminous research on the determinants of FDI for developed and developing countries, little has been done on this issue for transition economies, especially, for the Commonwealth of Independent States (CIS) countries. the present paper examines the determinants of inward Foreign Direct Investment (FDI) flows in the CIS during 1995-2010. the results of empirical analysis using panel data models, conducted with the purpose of identifying the factors that determine the motivation and decision of multinational companies (MNC) to invest in CIS economies, show that regardless of the presence of high investment risk in transition economies, the choice of FDI location always depends on a preliminary analysis of countries' advantages (FDI stock, market size, abundance in natural resources) and disadvantages at macro level (fiscal imbalance and inflation). These pre-existing conditions can always roughly predict the type of FDI (resource-seeking, market-seeking, efficiency-seeking).

Suggested Citation

  • Sobir Shukurov & Mansoor Maitah & Luboš Smutka, 2016. "Determinants of Foreign Direct Investments in Transition Economies: Case of Commonwealth of Independent Countries," Acta Universitatis Agriculturae et Silviculturae Mendelianae Brunensis, Mendel University Press, vol. 64(5), pages 1749-1761.
    • Handle: RePEc:mup:actaun:actaun_2016064051749
    DOI: 10.11118/actaun201664051749
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    References listed on IDEAS

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