Why Does Fdi Go Where it Goes? New Evidence From the Transition Economies

Yuko Kinoshita and Nauro Campos

No 2003/228, IMF Working Papers from International Monetary Fund

Abstract: This paper examines the importance of agglomeration economies and institutions vis-a-vis initial conditions and factor endowments in explaining the locational choice of foreign investors. Using a unique panel data set for 25 transition economies between 1990 and 1998, we find that the main determinants are institutions, agglomeration, and trade openness. We find important differences between the Eastern European and Baltic countries, on the one hand, and the CIS countries on the other: in the latter group, natural resources and infrastructure matter, while agglomeration matters only for the former group.

Keywords: WP; CIS country; FDI inflow; country FDI flow; FDI stock; FDI motive; natural resource; foreign direct investment; transition economies; FDI flow; Natural resources; Labor costs; Estimation techniques; Stocks; Eastern Europe; Asia and Pacific (search for similar items in EconPapers)
Pages: 32
Date: 2003-11-01
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Citations: View citations in EconPapers (219)

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Related works:
Working Paper: Why Does FDI Go Where it Goes? New Evidence from the Transitional Economies (2003)
Working Paper: WHY DOES FDI GO WHERE IT GOES? NEW EVIDENCE FROM THE TRANSITION ECONOMIES (2003)
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