The CEEC as FDI Attractors: A Menace to the EU Periphery?

Aurora Galego, Carlos Vieira and Isabel Vieira ()

Emerging Markets Finance and Trade, 2004, vol. 40, issue 5, 74-91

Abstract: The change of economic, social, and political orientation in Central and Eastern European countries (CEEC), together with the accession of a first group into the European Union in 2004, has raised a number of challenging questions. One object of interest has been the implications of Eastern openness in terms of international capital reallocation. This paper concentrates on the issue of foreign direct investment (FDI), a major channel of economic integration. In fact, in the particular case of these countries, a dramatic change in the pattern of FDI inflows took place in recent years. A number of studies have surveyed the determinants of FDI to this region, but the issue still remains relatively unexplored from the empirical point of view. Using a random effects panel data model in the analysis, we try to empirically uncover the main determinants of FDI and to examine the probability of FDI diversion from the EU periphery to these transition economies. This issue is especially interesting for the EU periphery in general, and for cheap labor suppliers such as Portugal in particular, because there are reasons to believe that some diversion of funds from the South to the East may be taking place.

Keywords: enlargement; FDI determinants; FDI diversion; foreign direct investment; gravity model (search for similar items in EconPapers)
Date: 2004
References: Add references at CitEc
Citations: View citations in EconPapers (22)

Downloads: (external link)
http://mesharpe.metapress.com/link.asp?target=contribution&id=CR68KNKACMBV3JF5 (text/html)
Access to full text is restricted to subscribers.

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:mes:emfitr:v:40:y:2004:i:5:p:74-91

Ordering information: This journal article can be ordered from
http://www.tandfonline.com/pricing/journal/MREE20

Access Statistics for this article

More articles in Emerging Markets Finance and Trade from Taylor & Francis Journals
Bibliographic data for series maintained by Chris Longhurst ().