Do FDI inflows to Eastern Europe and Central Asia respond to the business cycle? A sector level analysis
Nadia Doytch ()
The Journal of Economic Asymmetries, 2021, vol. 23, issue C
This study aims at establishing the behavior of sectorial Foreign Direct Investments (FDI) inflows, i.e. FDI into the sectors of extractives, manufacturing, aggregate services, and financial and non-financial services, in relation to the business cycle. We construct a model that controls for established determinants of FDI, including income, human capital, quality of institutions, and natural resource endowments, and apply a dynamic panel GMM estimator to data for 19 Eastern European and Central Asian economies. The results suggest that aggregate services FDI inflows are countercyclical, increasing during economic contractions and decreasing during economic booms, while the rest of the FDI inflows are acyclical, i.e. do not respond to the business cycle.
Keywords: Sectoral FDI; Economic fluctuations; Business cycles; Output gap; Eastern europe and central asia (search for similar items in EconPapers)
JEL-codes: F21 O16 O19 (search for similar items in EconPapers)
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (2) Track citations by RSS feed
Downloads: (external link)
Full text for ScienceDirect subscribers only
This item may be available elsewhere in EconPapers: Search for items with the same title.
Export reference: BibTeX
RIS (EndNote, ProCite, RefMan)
Persistent link: https://EconPapers.repec.org/RePEc:eee:joecas:v:23:y:2021:i:c:s1703494920300414
Access Statistics for this article
The Journal of Economic Asymmetries is currently edited by A.G. Malliaris
More articles in The Journal of Economic Asymmetries from Elsevier
Bibliographic data for series maintained by Catherine Liu ().