The Quality of Entrepreneurial Environment as a Factor of Foreign Direct Investments Inflow

Peter Kuzmisin and Alžbeta Šišková

Quality Innovation Prosperity, 2013, vol. 17, issue 2

Abstract: The content of this paper is built on the fact that foreign direct investments have the potential to influence the structure and quality of economic development and competitiveness that many scientific researches and studies have already confirmed. The paper presents entrepreneurial environment as a significant factor for increasing country’s competitiveness. It clarifies and proves relationship between entrepreneurial environment, or more precisely its barriers, and foreign direct investment inflows. The starting point is identification of the barriers of the Slovak entrepreneurial environment according to Doing Business 2012 by comparing Slovakia with the Visegrad Four Countries. Subsequently relationship of barriers (paying taxes, trading across borders, enforcing contracts, protecting investors) and FDI inflows on the sample of 25 leading countries for foreign investors according to FDI Confidence Index (Brazil, China, Germany, India, USA etc.) is tested by Spearman's rank correlation test. The paper specifies barriers of EE, which removal would have a real impact on increasing FDI inflows into economy of Slovakia with relevant effects on its competitiveness. Research limitations were determined by the availability of statistical data, relatively large sample of surveyed economies in the world and comparison with other assessments (indices) of FDI and competitiveness of countries. Given the limits on the scope of a magazine article, we will continue in our research in more detail in the future. Specific attention in this context will be devoted to the impact of investment incentives on FDI inflows. Methodology and selection of applied testing tool in synergy with selected statistical set of datas can bring new approach to the studied field and can stimulate extension of possibilities reached in this paper. The value of this paper lays in the specification of weak points of the Slovak entrepreneurial environment in the context of its location among countries of V4, and in the effort to confirm the significance of reducing these barriers of EE in terms of increasing competitiveness and FDI

Keywords: Entrepreneurial environment; barriers of entrepreneurial environment; competitiveness; direct foreign investment; investment environment (search for similar items in EconPapers)
JEL-codes: Z (search for similar items in EconPapers)
Date: 2013
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