Determinants of Foreign Direct Investment in the Former Soviet States : Enhancing real development: Optimizing the strategies (original) (raw)
The Determinants of Fdi in Six Former Fsu Countries: A Study of Data 1995–2017
Vol 19, No 1 (2020)
Foreign Direct Investment (FDI) can bring in much needed capital, particularly in emerging markets, help improve manufacturing and trade sectors, bring in more efficient technologies, increase local production and exports, create jobs and develop local skills, bring about improvements in soft and hard infrastructure and overall be a contributor to sustainable economic growth in the Gross Domestic Product (GDP). With all these desirable features, it becomes relevant to ascertain the factors which attract FDI to an economy or a group of adjacent economies. This paper explores the determinants of FDI in six Former Soviet Union (FSU): Ukraine, Belarus, Armenia, Russia, Moldova and Kazakhstan. After an extensive literature review of theories and empirical research and using a set of cross-sectional data over the period 1995–2017, an ARDL model is estimated with FDI/GDP as the dependent variable. Inflation, exchange rate changes, openness, economy size (GDP), Income levels (GNI per capita...
What determines foreign direct investment in Russia?
Central European Economic Journal
This article focuses on the determinants of inward foreign direct investment (FDI) in Russia. The article briefly describes the historical context of foreign investment policymaking in Russia since the beginning of the economic transition to an open market economy after the dissolution of the Soviet Union. When compared to other developing countries, Russia's FDI stocks continue to lag despite a set of proactive measures undertaken by the national government. Following the literature review, the most commonly cited determinants explaining inward FDI in Russia include market size, labour productivity, trade and investment barriers, domestic exchange rate, rule of law and institutional framework.This article aims to contribute empirically to the study of determinants of inward FDI in Russia.This article uses the Pseudo-Poisson Maximum Likelihood (PPML) estimation technique, the robustness of the PPML estimation is then verified using a standard autoregressive integrated moving ave...
DESCRIPTION The paper studies the interdependence of the economy size and foreign direct investments (FDI) in the transitional economies of Central, Southeastern and Eastern Europe. In the global capitalist economy, foreign direct investments (FDI) represent one of the key determinants of economic growth. Among some transitional economies, in the last 20 years, FDI represented one of factors that increased the economic growth, and in other transitional economies, the influence of FDI was minor or even negligible. In the literature devoted to the influence of FDI on economies, the research about the determinants of geographical pattern of FDI distribution usually focuses on the factors that determine why some states manage to draw FDI in higher levels than some other states. Our research focused on the transitional economies of Central, Southeastern and Eastern Europe, which were for the most part of the last 20 years net receivers of the FDI. Only a couple of these countries in the ...
Russian Journal of Economics (RuJE), 2020
Foreign direct investment (FDI) is viewed as one of the most crucial forms of capital inflows and significant drivers of economic growth in numerous countries. In particular, developing countries, emerging economies and countries engaged in the process of development have recognized the crucial importance of FDI as a critical contributor to their economic progress and increasing economic opportunities. The following research investigated and identified the determinants of FDI in the Central Asian countries, specifi-between 2000 and 2017. The methodology employed in the first part included comparative analysis of the foreign investment trends and gross domestic product (GDP), as well as an en-dogenous growth model. The result showed that five variables are robustly significant of FDI determinants: FDI (previous year), GDP, labor force, trade openness and tax. Additionally, this paper demonstrates that among the most significant FDI contributors are China, Russia and Japan as well as European countries because of the economic opportunities available; however, the USA is considered by Central Asian countries to offer the most opportunities for security control considerations rather than economic opportunities. Furthermore, the results suggest that the authorities in the Central Asia region should enhance the stability of their economic growth, labor force, trade openness and tax regulations to attract more FDI to the region.
Foreign Direct Investment in the Eurasian Transition States
2003
This paper presents a regression model designed to explain the distribution of foreign direct investment (FDI) in the countries of Central and Eastern Europe. Locational variables are identified from geography and economics literatures on location theory and foreign direct investment. The dependent variable is cumulative value of investments in each host country, accounting for initial outlays as well as subsequent investments and reinvested profits. The results make it possible to identify the most important determinants of FDI in the region (trade volume, followed by investment climate and density of transportation infrastructure).
Journal of Economic and Social Development (Varaždin), 2016
The paper studies the interdependence of the economy size and foreign direct investments (FDI) in the transitional economies of Central, Southeastern and Eastern Europe. In the global capitalist economy, foreign direct investments (FDI) represent one of the key determinants of economic growth. Among some transitional economies, in the last 20 years, FDI represented one of factors that increased the economic growth, and in other transitional economies, the influence of FDI was minor or even negligible. In the literature devoted to the influence of FDI on economies, the research about the determinants of geographical pattern of FDI distribution usually focuses on the factors that determine why some states manage to draw FDI in higher levels than some other states. Our research focused on the transitional economies of Central, Southeastern and Eastern Europe, which were for the most part of the last 20 years net receivers of the FDI. Only a couple of these countries in the years of the...
2010
The study focused on the transition economies of South Eastern Europe, Central Europe and those of the ex-Soviet countries, during the period 1990-2005. The main research aims included the identification of the distinct FDI features, the research for FDI determinants and the relation between FDI and the host countries’ institutions with a particular emphasis on corruption and poor governance phenomena. Additional to that the study shed light on the impact of transition process reforms on FDI. The research employed a variety of different data sources and empirical methods, in order to achieve its goals. The empirical analysis indicated that foreign investments in the area of interest were not particularly affected by the presence of corruption. Actually, foreign investors were rather encouraged by both high corruption and the low governance levels. Regarding FDI features, the formulated view is of foreign investments as business entities with secured financial support, export orienta...
2010
The present study investigates long-term developments in inward and outward FDI of 10 Central and Eastern European (CEE) countries using Dunning’s investment development path (IDP) paradigm as a theoretical framework. Its main purpose is to determine how far the CEE countries have progressed along their IDPs since the beginning of transition. The results show that half of the analyzed countries have already reached Stage 3 of the IDP, while the other half are either firmly in Stage 2 or are approaching Stage 3. With some notable exceptions, the study points to conformity of the analyzed IDP trajectories with Dunning’s model.