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The Interplay Between Foreign Direct Investment, Security and European Integration: The Case of the Central and Eastern European Countries

Author

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  • Carmen Raluca Stoian

    ()

  • Roger Vickerman

    ()

Abstract

A bi-directional relationship between FDI and economic reforms in ten Central European countries is tested, along with the role of the EU in breaking a potential vicious circle of insecurity, little investment, slow reforms, low prospects of EU membership and hence high insecurity. Using panel data regressions and a system of simultaneous equations, we find evidence that the prospect of EU membership has enhanced FDI in the less reformist candidates and that trade integration and increased EU financial assistance have improved FDI in the CEECs.

Suggested Citation

  • Carmen Raluca Stoian & Roger Vickerman, 2005. "The Interplay Between Foreign Direct Investment, Security and European Integration: The Case of the Central and Eastern European Countries," Studies in Economics 0509, School of Economics, University of Kent.
  • Handle: RePEc:ukc:ukcedp:0509
    as

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    References listed on IDEAS

    as
    1. Falcetti, Elisabetta & Raiser, Martin & Sanfey, Peter, 2002. "Defying the Odds: Initial Conditions, Reforms, and Growth in the First Decade of Transition," Journal of Comparative Economics, Elsevier, vol. 30(2), pages 229-250, June.
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    3. Jozef Konings, 1999. "The Effect of Direct Foreign Investment on Domestic Firms: Evidence from Firm Level Panel Data in Emerging Economies," LICOS Discussion Papers 8699, LICOS - Centre for Institutions and Economic Performance, KU Leuven.
    4. V.N. Balasubramanyam & David Greenaway, 1992. "Economic Integration and Foreign Direct Investment: Japanese Investment in the EC," Journal of Common Market Studies, Wiley Blackwell, vol. 30(2), pages 175-194, June.
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    6. Disdier, Anne-Celia & Mayer, Thierry, 2004. "How different is Eastern Europe? Structure and determinants of location choices by French firms in Eastern and Western Europe," Journal of Comparative Economics, Elsevier, vol. 32(2), pages 280-296, June.
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    More about this item

    Keywords

    foreign direct investment determinants; economic transition; economic reforms; Central and Eastern Europe;

    JEL classification:

    • F2 - International Economics - - International Factor Movements and International Business
    • C2 - Mathematical and Quantitative Methods - - Single Equation Models; Single Variables
    • C3 - Mathematical and Quantitative Methods - - Multiple or Simultaneous Equation Models; Multiple Variables
    • P26 - Economic Systems - - Socialist Systems and Transition Economies - - - Political Economy

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