Determinants of FDI into Central and Eastern European Countries: Pull or Push Effect?

Burcak Polat ()
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Burcak Polat: Eastern Mediterranean University, North Cyprus

Eurasian Journal of Economics and Finance, 2015, vol. 3, issue 4, 39-47

Abstract: Despite the growing interest in foreign direct investments (FDI), substantial uncertainty still exists regarding what stimulates foreign investors to operate in a foreign market and uneven distribution of FDI across countries. Using panel data for 2001-2012 period, the major determinants of the FDI inflows into the Central and Eastern European Countries are analysed in this study. Strong evidence are found that while EU CR indices, EU and USA real GDP growth rates and global financial crisis have power to explain FDI inflows among all other push factors, labour cost, electricity price, real exchange rate and host CR indices have strong influential on FDI as the most effective pull factors.However, study fails to find any effect of openness, tax rates on commercial profits, USA CR indices, interest rate differentials and host real GDP growth on FDI.

Keywords: Foreign Direct Investment; Panel Data; Capital Flows; Push Factors; Pull Factors (search for similar items in EconPapers)
Date: 2015
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Citations: View citations in EconPapers (2)

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