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Foreign Direct Investment in Central and Eastern European Countries: A Dynamic Panel Analysis

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  • Kai Carstensen
  • Farid Toubal

Abstract

This paper uses dynamic panel data methods to examine the determinants of Foreign Direct Investment (FDI) into Central and Eastern European Countries (CEECs). Our empirical model shows that the traditional determinants, such as market potential, low relative unit labor costs, a skilled workforce and relative endowments have significant and plausible e®ects. In addition, transition-specific factors such as the level and method of privatisation, and the country risk, play an important role in determining the flows of FDI into the CEECs and help explain the di®erent attractiveness for FDI of the individual countries.

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File URL: https://www.ifw-members.ifw-kiel.de/publications/foreign-direct-investment-in-central-and-eastern-european-countries-a-dynamic-panel-analysis/kap1143.pdf
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Bibliographic Info

Paper provided by Kiel Institute for the World Economy in its series Kiel Working Papers with number 1143.

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Length: 27 pages
Date of creation: Jan 2003
Date of revision:
Handle: RePEc:kie:kieliw:1143

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Keywords: Transition economies; FDI; Panel estimation;

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