Patterns of Foreign Direct Investment in the New EU Countries

Robert Sova, Lucian Albu (), Ion Stanciu and Anamaria Sova
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Robert Sova: Academy of Economic Studies, Bucharest
Ion Stanciu: Academy of Economic Studies, Bucharest
Anamaria Sova: CES, Sorbonne University, Paris

Journal for Economic Forecasting, 2009, vol. 6, issue 2, 42-51

Abstract: The aim of the paper is to assess the determinants of foreign direct investment (FDI) inflow for the recent members of the EU (CEEC-41) using panel data methods. Our analysis is important because FDI is considered as a main contributor to economic development, modernization, income growth, catching-up process and changes in specialization structure. In this paper, we adopt a rigorous econometric model to explain the FDI inflows. We examine the role played by economic and non-economic factors in FDI attractiveness. Using the gravity model and recent econometric techniques, we obtain the unbiased and convergent estimators. From an econometric point of view, the use of a Fixed Effect Vector Decomposition (FEVD) estimator for the gravity model appears to be convenient for our data sample.

Keywords: gravity models; panel data models; FDI; CEE countries (search for similar items in EconPapers)
JEL-codes: C23 F23 P33 (search for similar items in EconPapers)
Date: 2009
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Citations: View citations in EconPapers (9)

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