The Determinants of Foreign Direct Investment into the CEECs: New Evidence from Sectoral Patterns

Laura Resmini

LICOS Discussion Papers from LICOS - Centre for Institutions and Economic Performance, KU Leuven

Abstract: This paper analyses European Union FDI flows into the CEECs at a sector level, which is currently the less studied aspect of this issue. The aim is to understand whether and to what extent FDI in different sectors reacts to the same characteristics of the host countries. The paper first presents data that summarise the trend of FDI in the CEECs and, then, regression evidence that seeks to account for differences among sectors. A statistically significant positive association has been found between FDI and market size, wage differential, the stage of the transition process and the degree of openness of the economy as well. However, a statistically significant negative relation has been found for proximity to Europe and the degree of industrial concentration. This last effect suggests that strategic motivations completely offset the benefits generated by agglomeration economies. Controlling for sector specific effects, some differences emerge. Progress towards a market economy is relevant only in scale intensive and science based sectors, while labour cost is a potential attractiveness for foreign investors in traditional labour intensive sector and in science based ones. Also market considerations, proxied by the traditional gravity approach variables, affect FDI differently, depending on the industrial sector.

Keywords: Foreign direct investment; Transition; Central and Eastern Europe; panel data (search for similar items in EconPapers)
JEL-codes: C23 F15 F23 P20 (search for similar items in EconPapers)
Pages: 28 pages
Date: 1999
New Economics Papers: this item is included in nep-eec, nep-fin, nep-ifn and nep-mfd
References: Add references at CitEc
Citations: View citations in EconPapers (20)

Downloads: (external link)
http://www.econ.kuleuven.be/licos/publications/dp/dp83.pdf
Our link check indicates that this URL is bad, the error code is: 404 Not Found (http://www.econ.kuleuven.be/licos/publications/dp/dp83.pdf [301 Moved Permanently]--> https://feb.kuleuven.be/licos/publications/dp/dp83.pdf [301 Moved Permanently]--> https://feb.kuleuven.be/drc/licos/publications/dp/dp83.pdf)

Related works:
Journal Article: The Determinants of Foreign Direct Investment in the CEECs: New evidence from sectoral patterns (2000)
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:lic:licosd:8399

Access Statistics for this paper

More papers in LICOS Discussion Papers from LICOS - Centre for Institutions and Economic Performance, KU Leuven Contact information at EDIRC.
Bibliographic data for series maintained by ().