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Sectoral Composition of Foreign Direct Investment and External Vulnerability in Eastern Europe

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  • Yuko Kinoshita

Abstract

In the run up to the global crisis, countries in Central Eastern and Southeastern Europe attracted large capital inflows and some of them built up large external imbalances. This paper investigates whether these imbalances are linked to the sectoral composition of FDI. It shows that FDI in the tradable sectors leads to an improvement of the external balance. We also find that the countries with large market size, good infrastructure, greater trade integration, and educated labor force are more likely to receive more FDI in the tradable sectors.

Suggested Citation

  • Yuko Kinoshita, 2011. "Sectoral Composition of Foreign Direct Investment and External Vulnerability in Eastern Europe," IMF Working Papers 2011/123, International Monetary Fund.
    • Handle: RePEc:imf:imfwpa:2011/123
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    1. World Bank, "undated". "World Bank East Asia and Pacific Economic Update, April 2014 : Preserving Stability and Promoting Growth," World Bank Publications - Reports 18378, The World Bank Group.
    2. repec:agr:journl:v:2(602):y:2015:i:2(602):p:223-236 is not listed on IDEAS
    3. Yannis Stournaras, 2019. "Lessons from the Greek Crisis: Past, Present, Future," Atlantic Economic Journal, Springer;International Atlantic Economic Society, vol. 47(2), pages 127-135, June.
    4. Marcin Grela & Aleksandra Majchrowska & Tomasz Michałek & Jakub Mućk & Agnieszka Stążka-Gawrysiak & Grzegorz Tchorek & Marcin Wagner, 2017. "Is Central and Eastern Europe converging towards the EU-15?," NBP Working Papers 264, Narodowy Bank Polski.
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    7. Marinela GEAMĂNU, 2015. "Analysis of the evolution of foreign direct investment in the European Union, amid the global economic crisis," Theoretical and Applied Economics, Asociatia Generala a Economistilor din Romania - AGER, vol. 0(2(603), S), pages 223-236, Summer.
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