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Foreign Investments and Institutional Convergence in South-eastern Europe

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  • Eleni A. Kaditi

Abstract

Foreign investments are in the focus of most governments around the world. In order to be able to set a policy agenda that is successful in promoting FDI, it is necessary to understand the determinants of foreign investments. This paper examines whether, and to what extent, sound institutions and the degree of regulation deter or attract FDI flows in four economies of south-eastern Europe. In a dynamic panel analysis, a broad set of institutional and regulatory variables that may affect the decision of foreign investors to undertake investment projects in this region is examined, using firm-level data. Analysis shows that the quality of the institutional environment significantly influences foreign capital. Governments in this region should, therefore, focus primarily on creating an effective legal system, having relatively stable political and economic conditions.

Suggested Citation

  • Eleni A. Kaditi, 2013. "Foreign Investments and Institutional Convergence in South-eastern Europe," International Economic Journal, Taylor & Francis Journals, vol. 27(1), pages 109-126, March.
    • Handle: RePEc:taf:intecj:v:27:y:2013:i:1:p:109-126
    DOI: 10.1080/10168737.2012.682076
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    Cited by:

    1. Andrea Ascani & Riccardo Crescenzi & Simona Iammarino, 2015. "Economic Institutions and the Location Strategies of European Multinationals in their Geographical Neighbourhood," LEQS – LSE 'Europe in Question' Discussion Paper Series 97, European Institute, LSE.
    2. Silviu DU?ULESCU & Ileana NI?ULESCU-ASHRAFZADEH, 2016. "Corruption in Romania," The Audit Financiar journal, Chamber of Financial Auditors of Romania, vol. 14(138), pages 680-680, June.
    3. Andile Dube & Sylvester Senyo Horvey, 2023. "Institutional quality and renewable energy capital flows in Africa," Future Business Journal, Springer, vol. 9(1), pages 1-16, December.
    4. Cosmin Marinescu & Octavian-Dragomir Jora, 2013. "Assessment on the “institutional economics” of corruption. Business and development in Romania, between formal and informal practices," The AMFITEATRU ECONOMIC journal, Academy of Economic Studies - Bucharest, Romania, vol. 15(Special 7), pages 603-616, November.

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