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The Impact of Economic Sentiments on Foreign Direct Investments

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  • Milena - Jana Schank

    (West University of Timisoara)

Abstract

The main purpose of this study is the estimation of the impact of subjective determinants on foreign direct investments. Thus, by applying an econometric model, the volume of foreign direct investments is considered to be a dependent variable and the gross domestic product (GDP), the trade openness and the Economic Sentiment Indicator are considered to be independent variables for Germany, Finland, Italy, Netherlands and Great Britain, during thirty years (1985-2014). The main results indicate the fact that between investors’ sentiments and their investment decisions is an inverse relationship only in case of Italy and Great Britain due to the cultural specifications met in these states in which the emotional factors seem to prevail the rational ones.

Suggested Citation

  • Milena - Jana Schank, 2016. "The Impact of Economic Sentiments on Foreign Direct Investments," Ovidius University Annals, Economic Sciences Series, Ovidius University of Constantza, Faculty of Economic Sciences, vol. 0(2), pages 605-610, February.
    • Handle: RePEc:ovi:oviste:v:xvi:y:2016:i:2:p:605-610
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    References listed on IDEAS

    as
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    More about this item

    Keywords

    foreign direct investments; sentiments; gross domestic product; return;
    All these keywords.

    JEL classification:

    • F21 - International Economics - - International Factor Movements and International Business - - - International Investment; Long-Term Capital Movements
    • G02 - Financial Economics - - General - - - Behavioral Finance: Underlying Principles
    • G11 - Financial Economics - - General Financial Markets - - - Portfolio Choice; Investment Decisions

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