IDEAS home Printed from https://ideas.repec.org/a/plo/pone00/0313161.html
   My bibliography  Save this article

Empirical research of foreign direct investments efficiency in the European Union on the edge of pandemic outbreak

Author

Listed:
  • Milan Džogan
  • Roman Lacko
  • Zuzana Hajduová

Abstract

The study focuses on the effects of the COVID-19 pandemic on the economy and foreign direct investments in the European Union countries. Using data envelopment analysis constant and variable returns to scale models, and the Malmquist productivity index, we measured the efficiency of economic resource utilization concerning foreign direct investments and gross domestic product. These efficiencies were assessed in 2019, before the full outbreak of COVID-19, and in 2020, when uncertainty and the consequences of the pandemic were most pronounced. Despite the challenges posed by the pandemic, the European Union displayed economic resilience in the first year, with no significant reduction in foreign direct investment efficiency. Lower-income European Union countries saw an increase in foreign direct investment efficiency, attributing this to positive changes in managerial efficiency. This suggests that decisions made by authorities positively impacted foreign direct investment flows in economically less developed European Union regions despite restrictive measures and market uncertainties.

Suggested Citation

  • Milan Džogan & Roman Lacko & Zuzana Hajduová, 2025. "Empirical research of foreign direct investments efficiency in the European Union on the edge of pandemic outbreak," PLOS ONE, Public Library of Science, vol. 20(1), pages 1-13, January.
    • Handle: RePEc:plo:pone00:0313161
    DOI: 10.1371/journal.pone.0313161
    as

    Download full text from publisher

    File URL: https://journals.plos.org/plosone/article?id=10.1371/journal.pone.0313161
    Download Restriction: no
    File URL: https://journals.plos.org/plosone/article/file?id=10.1371/journal.pone.0313161&type=printable
    Download Restriction: no
    File URL: https://libkey.io/10.1371/journal.pone.0313161?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    References listed on IDEAS

    as
    1. Youssra Ben Romdhane & Souhaila Kammoun & Imen Werghi, 2022. "Economic resilience to the FDI shock during the COVID-19 pandemic: evidence from Asia," Journal of Economic and Administrative Sciences, Emerald Group Publishing Limited, vol. 40(4), pages 889-909, May.
    2. Yingjie Fu & Antonio Alleyne & Yifei Mu, 2021. "Does Lockdown Bring Shutdown? Impact of the COVID-19 Pandemic on Foreign Direct Investment," Emerging Markets Finance and Trade, Taylor & Francis Journals, vol. 57(10), pages 2792-2811, August.
    3. Lidan Zhang & Gonul Colak, 2022. "Foreign direct investment and economic policy uncertainty in China," Economic and Political Studies, Taylor & Francis Journals, vol. 10(3), pages 279-289, July.
    4. Sofiane Ghali & Sami Rezgui, 2011. "FDI Contribution to Technical Efficiency in the Tunisian Manufacturing Sector: Evidence from Micro-panel Data," International Economic Journal, Taylor & Francis Journals, vol. 25(2), pages 319-339.
    5. Linh Tu Ho & Christopher Gan, 2021. "Foreign Direct Investment and World Pandemic Uncertainty Index: Do Health Pandemics Matter?," JRFM, MDPI, vol. 14(3), pages 1-15, March.
    6. Anastasiou Athanasios & Kalligosfyris Charalampos & Kalamara Eleni, 2022. "Assessing the effectiveness of tax administration in macroeconomic stability: evidence from 26 European Countries," Economic Change and Restructuring, Springer, vol. 55(4), pages 2237-2261, November.
    7. Caroline Jardet & Cristina Jude & Menzie Chinn, 2023. "Foreign direct investment under uncertainty evidence from a large panel of countries," Review of International Economics, Wiley Blackwell, vol. 31(3), pages 854-885, August.
    8. Óscar Afonso, 2024. "Growth in the European Union: the role of FDI in factor efficiency," Applied Economics Letters, Taylor & Francis Journals, vol. 31(11), pages 975-983, June.
    9. Cai, Huifen & Boateng, Agyenim & Guney, Yilmaz, 2019. "Host country institutions and firm-level R&D influences: An analysis of European Union FDI in China," Research in International Business and Finance, Elsevier, vol. 47(C), pages 311-326.
    10. C. Lovell, 2003. "The Decomposition of Malmquist Productivity Indexes," Journal of Productivity Analysis, Springer, vol. 20(3), pages 437-458, November.
    11. Mojtaba Hajian Heidary, 2022. "A system dynamics model of the impact of COVID-19 pandemic and foreign direct investment in the global supply chain," Future Business Journal, Springer, vol. 8(1), pages 1-9, December.
    12. Tamara V. Teplova & Tatiana V. Sokolova, 2019. "Building the Index of Efficiency of FDI Transformation: Economic Development and Intellectual Capital," Emerging Markets Finance and Trade, Taylor & Francis Journals, vol. 55(10), pages 2164-2184, August.
    13. Saleh, Emad Alchikh, 2023. "The effects of economic and financial crises on FDI: A literature review," Journal of Business Research, Elsevier, vol. 161(C).
    14. Alsaleh, Mohd & Abdul-Rahim, A.S. & Mohd-Shahwahid, H.O., 2017. "Determinants of technical efficiency in the bioenergy industry in the EU28 region," Renewable and Sustainable Energy Reviews, Elsevier, vol. 78(C), pages 1331-1349.
    15. Paul Cheung & Ammu George & Taojun Xie & Yan Zhu, 2024. "Pandemic arbitrage in foreign direct investments: A perspective on the modes of entry," Applied Economics Letters, Taylor & Francis Journals, vol. 31(10), pages 901-906, June.
    16. Özcan Karahan & Musa Bayır, 2022. "The effects of monetary policies on foreign direct investment inflows in emerging economies: some policy implications for post-COVID-19," Future Business Journal, Springer, vol. 8(1), pages 1-14, December.
    17. Jones, Jonathan & Serwicka, Ilona & Wren, Colin, 2018. "Economic integration, border costs and FDI location: Evidence from the fifth European Union enlargement," International Review of Economics & Finance, Elsevier, vol. 54(C), pages 193-205.
    Full references (including those not matched with items on IDEAS)

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Sinem Koçak & Özge Barış-Tüzemen, 2022. "Impact of the COVID-19 on foreign direct investment inflows in emerging economies: evidence from panel quantile regression," Future Business Journal, Springer, vol. 8(1), pages 1-12, December.
    2. Zhao, Kai & Mo, Minjie & Shen, Jun, 2024. "Pandemics and FDI inflows: The role of infrastructures," International Review of Economics & Finance, Elsevier, vol. 93(PA), pages 552-566.
    3. Jamiu Olamilekan Badmus & Sodiq Olaide Bisiriyu & Oluwadamilola Samuel Alawode, 2022. "Does COVID-19 shock endanger the flows of FDI in OECD? Empirical evidence based on AMG panel estimator," Future Business Journal, Springer, vol. 8(1), pages 1-14, December.
    4. Jaewon Jung, 2023. "Multinational Firms and Economic Integration: The Role of Global Uncertainty," Sustainability, MDPI, vol. 15(3), pages 1-18, February.
    5. Kerstens, Kristiaan & Van de Woestyne, Ignace, 2014. "Comparing Malmquist and Hicks–Moorsteen productivity indices: Exploring the impact of unbalanced vs. balanced panel data," European Journal of Operational Research, Elsevier, vol. 233(3), pages 749-758.
    6. Yanli Ji & Jie Xue & Kaiyang Zhong, 2022. "Does Environmental Regulation Promote Industrial Green Technology Progress? Empirical Evidence from China with a Heterogeneity Analysis," IJERPH, MDPI, vol. 19(1), pages 1-23, January.
    7. Pick-Soon Ling & Ming K. Lim & Ming-Lang Tseng, 2020. "Assessing Sustainable Foreign Direct Investment Performance in Malaysia: A Comparison on Policy Makers and Investor Perceptions," Sustainability, MDPI, vol. 12(20), pages 1-38, October.
    8. Qian Wang & Zhuoya Du & Boyu Wang & Yung‐ho Chiu & Tzu‐Han Chang, 2022. "Environmental regulation and foreign direct investment attractiveness: Evidence from China provinces," Review of Development Economics, Wiley Blackwell, vol. 26(2), pages 899-917, May.
    9. Chen, Xiaoqing & Liu, Xinwang & Zhu, Qingyuan, 2022. "Comparative analysis of total factor productivity in China's high-tech industries," Technological Forecasting and Social Change, Elsevier, vol. 175(C).
    10. Pastor, Jesus T. & Lovell, C.A. Knox & Aparicio, Juan, 2020. "Defining a new graph inefficiency measure for the proportional directional distance function and introducing a new Malmquist productivity index," European Journal of Operational Research, Elsevier, vol. 281(1), pages 222-230.
    11. Junjie Zhao, 2023. "Breaking the general election effect. The impact of the 2020 US presidential election on Chinese economy and counter strategies," Papers 2304.11518, arXiv.org.
    12. Pasurka, Carl Jr., 2006. "Decomposing electric power plant emissions within a joint production framework," Energy Economics, Elsevier, vol. 28(1), pages 26-43, January.
    13. Antonio Peyrache, 2014. "Hicks-Moorsteen versus Malmquist: a connection by means of a radial productivity index," Journal of Productivity Analysis, Springer, vol. 41(3), pages 435-442, June.
    14. Ekaterina Koroleva & Maxim Kopeykin, 2022. "Understanding of Macro Factors That Affect Yield of Government Bonds," Risks, MDPI, vol. 10(8), pages 1-10, August.
    15. W. Erwin Diewert & Kevin J. Fox, 2014. "Decomposing Bjurek Productivity Indexes into Explanatory Factors," Discussion Papers 2014-33, School of Economics, The University of New South Wales.
    16. Mariasole Bannò & Emilia Filippi, 2024. "Women in top echelon positions and firm internationalisation strategies: What do we know? How do we know? Where should we be heading?," Journal of Management & Governance, Springer;Accademia Italiana di Economia Aziendale (AIDEA), vol. 28(4), pages 1257-1302, December.
    17. Thi-Nham Le & Thanh-Tuan Dang, 2022. "An Integrated Approach for Evaluating the Efficiency of FDI Attractiveness: Evidence from Vietnamese Provincial Data from 2012 to 2022," Sustainability, MDPI, vol. 14(20), pages 1-25, October.
    18. Wang, Qiang & Jiang, Feng, 2019. "Integrating linear and nonlinear forecasting techniques based on grey theory and artificial intelligence to forecast shale gas monthly production in Pennsylvania and Texas of the United States," Energy, Elsevier, vol. 178(C), pages 781-803.
    19. C.J. O'Donnell, 2011. "The Sources of Productivity Change in the Manufacturing Sectors of the U.S. Economy," CEPA Working Papers Series WP072011, School of Economics, University of Queensland, Australia.
    20. Aamir Aijaz Syed & Assad Ullah & Muhammad Abdul Kamal, 2024. "Impact of COVID-19 and lockdown stringency on foreign institutional investment in India: evidence from wavelet coherence and spectral causality approaches," Quality & Quantity: International Journal of Methodology, Springer, vol. 58(3), pages 2433-2452, June.

    More about this item

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:plo:pone00:0313161. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: plosone (email available below). General contact details of provider: https://journals.plos.org/plosone/ .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.