Foreign Direct Investment in Central and Eastern European Countries: A Dynamic Panel Analysis

Kai Carstensen () and Farid Toubal

Kiel Working Papers from Kiel Institute for the World Economy

Abstract: 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 e®ects. In addition, transition-specific factors such as the level and method of privatisation, and the country risk, play an important role in determining the flows of FDI into the CEECs and help explain the di®erent attractiveness for FDI of the individual countries.

Keywords: Transition economies; FDI; Panel estimation (search for similar items in EconPapers)
JEL-codes: F21 F23 P33 (search for similar items in EconPapers)
New Economics Papers: this item is included in nep-ifn and nep-tra
Date: 2003-01
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Related works:
Journal Article: Foreign direct investment in Central and Eastern European countries: a dynamic panel analysis (2004)
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Persistent link: http://EconPapers.repec.org/RePEc:kie:kieliw:1143

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