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Does Foreign Direct Investment (FDI) Contribute to Poverty Reduction? Empirical Evidence from Central European and Western Balkan Countries

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  • Mehmed Ganić

Abstract

This paper seeks to empirically examine the validity of nexus between Foreign Direct Investment (FDI) and poverty reduction in the context of twelve European transition and post-transition countries divided in two regions, between 2000 and 2015. The empirical analysis investigates whether some variations in poverty reduction are influenced by countries’ FDI performance and lead by progress in the EU integration process. The study finds that the nexus between FDI and poverty reduction varies between two regions (the Western Balkan region and the Central Europe region). While the relationship between FDI and poverty reduction has a positive effect in the Western Balkan region, it is insignificant and negative in the Central European region. In addition, the findings confirm some earlier assumptions that FDI impacts poverty reduction more strongly in poorer countries (the Western Balkan region) than in wealthier countries (the Central European region). JEL Codes - F10; F23

Suggested Citation

  • Mehmed Ganić, 2019. "Does Foreign Direct Investment (FDI) Contribute to Poverty Reduction? Empirical Evidence from Central European and Western Balkan Countries," Scientific Annals of Economics and Business (continues Analele Stiintifice), Alexandru Ioan Cuza University, Faculty of Economics and Business Administration, vol. 66(1), pages 15-27, March.
    • Handle: RePEc:aic:saebjn:v:66:y:2019:i:1:p:15-27:n:127
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    More about this item

    Keywords

    Foreign Direct Investment (FDI); Western Balkan; determinants of FDI; panel data analysis;
    All these keywords.

    JEL classification:

    • F10 - International Economics - - Trade - - - General
    • F23 - International Economics - - International Factor Movements and International Business - - - Multinational Firms; International Business

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