FDI in the CEEC's and the Theory of Real Options: An Empirical Assessment
AbstractBuilding on the empirical evidence resulting from a newly developed database of foreign direct investment (FDI) operations in the countries of Central and Eastern Europe (CEECs), panel data techniques are used to show that, at the sector level, a consistent modelling of FDI flows needs to take into account not only the determinants traditionally considered by the literature, including the recent developments on gravity models, but also variables linked to the institutional environment in which the FDI is undertaken. The inclusion of these variables, affecting the risk and the uncertainty of the FDI operation, is in line with the main findings of the real option theory of investments, whose implications are here empirically tested with success.
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Bibliographic InfoPaper provided by LICOS - Centre for Institutions and Economic Performance, KU Leuven in its series LICOS Discussion Papers with number 7698.
Length: 34 pages
Date of creation: 01 Sep 1998
Date of revision:
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More information through EDIRC
panel data; real option theory; gravity models; FDI; transition economies;
Find related papers by JEL classification:
- C23 - Mathematical and Quantitative Methods - - Single Equation Models; Single Variables - - - Models with Panel Data; Spatio-temporal Models
- D81 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Criteria for Decision-Making under Risk and Uncertainty
- F15 - International Economics - - Trade - - - Economic Integration
- F21 - International Economics - - International Factor Movements and International Business - - - International Investment; Long-Term Capital Movements
- P20 - Economic Systems - - Socialist Systems and Transition Economies - - - General
This paper has been announced in the following NEP Reports:
- NEP-ALL-2003-10-20 (All new papers)
- NEP-EEC-2003-10-20 (European Economics)
- NEP-IFN-2003-10-20 (International Finance)
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
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