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Theoretical Model

In: Determinants of FDI in Central and Eastern Europe

Author

Listed:
  • Hanna Makhavikova

    (Otto-von-Guericke University Magdeburg)

Abstract

This chapter considers the theoretical framework. We started by considering the basic model offered by Neary (Manchester School 70(3):291–314, 2002) which studies location choices in homogenous countries, and examined three scenarios: equal external and internal trade barriers, regional preferential trade agreements, and zero trading costs between member countries. Further, we implemented these three scenarios for heterogeneous countries with different market sizes, external tariffs, labour and installation costs and analysed how changed market characteristics influence the previous findings. Finally, we derived a FDI model.

Suggested Citation

  • Hanna Makhavikova, 2018. "Theoretical Model," Contributions to Economics, in: Determinants of FDI in Central and Eastern Europe, chapter 0, pages 81-132, Springer.
  • Handle: RePEc:spr:conchp:978-3-319-91878-5_3
    DOI: 10.1007/978-3-319-91878-5_3
    as

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