Determinants of FDI Stock in Some Central European Countries

Popescu Liviu, Brostescu Simina, Sitnikov Catalina () and Vasilescu Laura
Additional contact information
Popescu Liviu: Department of Statistics and Economic Informatics, Faculty of Economics and Business Administration, University of Craiova, 200585 Craiova, Romania
Brostescu Simina: Department of Statistics and Economic Informatics, Faculty of Economics and Business Administration, University of Craiova, 200585 Craiova, Romania
Sitnikov Catalina: Department of Management, Marketing and Business Administration, Faculty of Economics and Business Administration, University of Craiova, 200585 Craiova, Romania
Vasilescu Laura: Department of Finances, Faculty of Economics and Business Administration, University of Craiova, 200585 Craiova, Romania

JRFM, 2023, vol. 16, issue 3, 1-31

Abstract: Given the importance of foreign direct investment (FDI) in the economy, the purpose of this study is to identify and investigate the economic indicators that can explain the development of FDI in the economies of Central and Eastern European countries such as the Czech Republic, Poland, Hungary, and Slovenia throughout the period 1995–2020. When developing multiple linear regression models, the following explanatory variables were considered: exports, imports, import concentration and diversification indices, the balance of trade, the balance of payments, and different components of the economic freedom index. Therefore, it was shown that a rise in exports and imports has a beneficial impact on enhancing the flow of foreign direct investment (FDI) in each of the nations examined for this study. Furthermore, an increase in the value of the import diversification index is shown to have a beneficial effect on the levels of foreign direct investment (FDI) in the Czech Republic, Hungary, and Slovenia, as determined by this study. On the other hand, the import concentration index has been shown to benefit foreign direct investment in Poland. Furthermore, it was discovered that the balance of payments was a positive factor in the Hungarian economy. In contrast, the trade balance was shown to be a positive element in Poland and Slovenia. Both indicators have positively impacted foreign direct investment (FDI) flow.

Keywords: foreign direct investment stock; multiple linear regression; international trade; economic freedom index; quantitative methods (search for similar items in EconPapers)
JEL-codes: C E F2 F3 G (search for similar items in EconPapers)
Date: 2023
References: View references in EconPapers View complete reference list from CitEc
Citations:

Downloads: (external link)
https://www.mdpi.com/1911-8074/16/3/164/pdf (application/pdf)
https://www.mdpi.com/1911-8074/16/3/164/ (text/html)

Related works:
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:gam:jjrfmx:v:16:y:2023:i:3:p:164-:d:1084831

Access Statistics for this article

JRFM is currently edited by Ms. Chelthy Cheng

More articles in JRFM from MDPI
Bibliographic data for series maintained by MDPI Indexing Manager ().