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Foreign direct investment in Central and Eastern European countries: A dynamic panel analysis

  • Carstensen, Kai
  • Toubal, Farid

This paper uses dynamic panel data methods to examine the determinants of foreign direct investment (FDI) into Central and Eastern European countries (CEECs). Our empirical model shows that the traditional determinants, such as market potential, low relative unit labor costs, a skilled workforce and relative endowments, have significant and plausible effects. In addition, transition-specific factors, such as the level and method of privatization and the country risk, play important roles in determining the flows of FDI into the CEECs and help to explain the differing attractiveness of the individual countries to foreign investors.

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Paper provided by University of Munich, Department of Economics in its series Munich Reprints in Economics with number 19965.

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Date of creation: 2004
Date of revision:
Publication status: Published in Journal of Comparative Economics 1 32(2004): pp. 3-22
Handle: RePEc:lmu:muenar:19965
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