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Globalization and FDIs: determinants and competition effects in Central and Eastern European Countries

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  • Natalia VECHIU

Abstract

Based on a new economic geography model and gravity theory, this article analyzes FDI determinants in the CEECs and competition effects in terms of inward FDIs under increasing economic integration. Applying different econometric techniques (fixed effects, PQML), the results show that market potential and communications infrastructure are more important FDI determinants than wages in the CEECs. Also, they confirm competition effects triggered by Chinese and Southern Europe relative communication costs. We find weak evidence for wage competition effects.

Suggested Citation

  • Natalia VECHIU, 2010. "Globalization and FDIs: determinants and competition effects in Central and Eastern European Countries," Working Papers 2010-2011_8, CATT - UPPA - Université de Pau et des Pays de l'Adour, revised Nov 2010.
  • Handle: RePEc:tac:wpaper:2010-2011_8
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    File URL: http://gtl.univ-pau.fr/travaux/94F_2010_2011_8DocWcattGlobalizationFDIsCentralEasternEuropeanCountriesNVechiu.pdf
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    References listed on IDEAS

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