EconPapers    
Economics at your fingertips  
 

THE ROLE OF INVESTMENT PROMOTION POLICY IN ATTRACTING FOREIGN DIRECT INVESTMENT: THE CASE OF SLOVAKIA

Aneta Hintošová and Terézia Barlašová

Public administration issues, 2021, issue 5, 27-40

Abstract: Foreign direct investment (FDI) is generally considered as an important driver of economic growth and employment opportunities. In particular, countries in transition are adopting their investment promotion policies to attract FDI and direct it to the required sectors and regions. Public financial support in the form of investment incentives is used as one of the direct tools of investment promotion policy. However, this financial support is only considered effective in attracting FDI if the country attains the minimum threshold of quality of the business environment. The aim of the present study is to evaluate development of investment promotion policy, especially the provision of financial and fiscal investment incentives, as well as the level of economic freedom with regard to attracting FDI in Slovakia. The findings indicate that the preference of particular forms of investment incentives by the Slovak government has changed over time. The results of the regression analysis further show that while financial incentives have a positive statistically significant effect on FDI inflows, in the case of fiscal stimuli this effect is surprisingly negative. Based on our results, the overall level of economic freedom seems to not have a statistically significant effect on attracting FDI in Slovakia. The study contributes to the literature by providing a rationale for investment promotion policy reform and by offering some implications for governments seeking to attract targeted FDI.

Keywords: investment promotion policy; investment incentives; financial aid; fiscal aid; economic freedom; foreign direct investment; Slovakia (search for similar items in EconPapers)
Date: 2021
References: View references in EconPapers View complete reference list from CitEc
Citations: Track citations by RSS feed

Downloads: (external link)
http://vgmu.hse.ru/data/2021/06/10/1442527981/3_Bloc_Engl_1_5_2021.pdf (application/pdf)

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:nos:vgmu00:2021:i:5:p:27-40

Access Statistics for this article

More articles in Public administration issues from Higher School of Economics
Bibliographic data for series maintained by Irina A. Zvereva ().

 
Page updated 2021-07-31
Handle: RePEc:nos:vgmu00:2021:i:5:p:27-40