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Trade Openness, Investment Freedom- Selected Country Risk Indicators, Impact On Foreign Direct Investments, A Panel Vector Autoregression Model Approach

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  • Iulia ELENES PLATONA

    (Department of Marketing and International Economic Relations, Faculty of Economics and Business Administration, West University of Timișoara, România)

Abstract

We employ a panel vector autoregression model (PVAR) selecting as endogenous variables Foreign Direct Investments percent of GDP, Trade Openness and Investment Freedom for a database comprised of European Countries. The data are collected from the Global Economy database. We compare different PVAR models changing the input of desired lags. We test the Hansen test for over-identifying restrictions and we generate the Generalised impulse response functions. The article uses a Hahn Kuehrsteiner Panel Var estimation estimating a stationarity PVAR with fixed effects. Econometric analysis shows a significant impact of trade openness and investment freedom indicators on foreign direct investment in Europe.

Suggested Citation

  • Iulia ELENES PLATONA, 2022. "Trade Openness, Investment Freedom- Selected Country Risk Indicators, Impact On Foreign Direct Investments, A Panel Vector Autoregression Model Approach," Annals of Faculty of Economics, University of Oradea, Faculty of Economics, vol. 2(2), pages 198-205, December.
    • Handle: RePEc:ora:journl:v:1:y:2022:i:2:p:198-205
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    References listed on IDEAS

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    More about this item

    Keywords

    trade openness; investment freedom; foreign direct investments; panel vector autoregression model;
    All these keywords.

    JEL classification:

    • F63 - International Economics - - Economic Impacts of Globalization - - - Economic Development
    • E02 - Macroeconomics and Monetary Economics - - General - - - Institutions and the Macroeconomy
    • F00 - International Economics - - General - - - General
    • F23 - International Economics - - International Factor Movements and International Business - - - Multinational Firms; International Business

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