IMPACT OF FOREIGN DIRECT INVESTMENT ON THE ECONOMIC GROWTH OF THE NEW MEMBER STATES FROM CENTRAL AND EASTERN EUROPE

Ivan Todorov, Tsvetomir Tsvetkov, Sofiya Mirchova and Kalina Durova
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Tsvetomir Tsvetkov: Faculty of Philosophy, Sofia University "St. Kliment Ohridski"
Sofiya Mirchova: Faculty of Economics, South-West Univeristy "Neofit Rilski"
Kalina Durova: Faculty of Economics, South-West Univeristy "Neofit Rilski"

Ekonomski pregled, 2022, vol. 73, issue 6, 847-880

Abstract: The goal of this paper is to study the effects of foreign direct investment (FDI) on the economic growth of ten new member states (NMS) from Central and Eastern Europe (CEE), which joined the European Union (EU) in 2004 and 2007 – the Czech Republic, Estonia, Hungary, Latvia, Lithuania, Poland, Slovakia, Slovenia, Bulgaria and Romania. Croatia is excluded from the analysis since it became a EU member relatively late - in 2013. A vector autoregression (VAR) of annual data for the period 2007-2019 is employed. The empirical results indicate that FDI does not affect the real GDP growth rate of the NMS from CEE. The research results also show that FDI Granger-causes the economic growth of the NMS from CEE neither in the short run nor in the long term.

Keywords: new member states; economic growth; foreign direct investment; vector autoregression (search for similar items in EconPapers)
JEL-codes: E22 F21 F43 O47 (search for similar items in EconPapers)
Date: 2022
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Persistent link: https://EconPapers.repec.org/RePEc:hde:epregl:v:73:y:2022:i:6:p:847-880

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