The dark side of landlockedness: Examining the determinants of foreign direct investment flows in transition economies

Ikboljon Kasimov, Hayot Berk Saydaliev, Lu Wencong

European Journal of Comparative Economics, 2024, vol. 21, issue 1, 35 - 63

Abstract: This study investigates the determinants of FDI to 12 transition economies in the Commonwealth of Independent States (CIS) by incorporating the market, institutional, and geographic factors, using panel data from 2002 to 2020. We analyze whether and how these factors differ across regions based on country-specific geographic location characteristics. The results of the Prais-Winsten regression with panel-corrected standard errors (PCSEs) show that market size, trade openness, natural resources, institutional quality, and sea access are positively associated with FDI. On the contrary, external debt and landlockedness deter FDI, but the adverse effect of landlockedness may be neutralized by sea access.

Keywords: Foreign direct investment; Economic freedom; Landlocked; Sea-access; Transition economies (search for similar items in EconPapers)
JEL-codes: F15 F21 O53 (search for similar items in EconPapers)
Date: 2024
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Persistent link: https://EconPapers.repec.org/RePEc:liu:liucej:v:21:y:2024:i:1:p:35-63

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