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How to Catch Foreign Fish? FDI and Privatization in EU Accession Countries Author info | Abstract | Publisher info | Download info | Related research | Statistics Bruno Merlevede ()
Koen Schoors
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We examine the determinants of FDI stocks of ‘old’ EU-members in ten accession countries. Our partial adjustment framework results in a dynamic panel data analysis. In addition to the traditional variables, such as market potential and unit labour costs, we find institutional development to be a robust determinant of equilibrium FDI stocks. The adjustment towards equilibrium is rapid. The relationship between FDI and the privatization process is complex. Non-direct privatization schemes negatively affect the speed of adjustment, whereas direct privatization strategies positively affect the equilibrium itself. Privatization history increases equilibrium FDI stocks, independently of the method applied.
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Paper provided by William Davidson Institute at the University of Michigan Stephen M. Ross Business School in its series William Davidson Institute Working Papers Series with number
wp785.
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Date of creation: 01 Aug 2005Date of revision:
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Keywords: foreign direct investment privatisation partial adjustment Other versions of this item:
Find related papers by JEL classification: F20 - International Economics - - International Factor Movements and International Business - - - General F23 - International Economics - - International Factor Movements and International Business - - - Multinational Firms; International Business P33 - Economic Systems - - Socialist Institutions and Their Transitions - - - International Linkages
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