FDI Motivations in CEE Countries. The Role of Governance Ethics

Oana Popovici and Adrian Cantemir Calin

Chapter Chapter 7 in Applied Ethics for Entrepreneurial Success: Recommendations for the Developing World, 2019, pp 93-110 from Springer

Abstract: Abstract We revisit the topic of FDI motivations for the Central and Eastern European region, taking into account the different levels of economic development of the source countries. Our modelling setup includes fixed effects panel models, relying on data specific to five CEE states in the 2003–2012 period. In this context, we investigate the significance of a wide set of FDI determinants categorized according to a motive-based taxonomy, evidencing a vivid interest for the impact raised by the good governance of the host countries. We find that, in general, investors from emerging countries are market-oriented and target locations with strategic resources in their quest to harness benefits and skills. On the opposite spectrum, investors from developed economies select host countries on the basis of the potential of transferring and using technology and on the basis of endowment with strategic-assets. As compared to other types of determinants, we notice the fact that variables pointing to good governance are significant for investors from emerging markets, but overlooked by those in developing countries. We conclude that investors located in countries with different levels of economic development have distinct investing motivations. Those originating from emerging countries display a market-seeking behaviour and asset-augmenting motivations, while those from developed countries are rather asset-exploiting interested, being attracted by market opportunities and efficient and strategic-assets abundant host locations.

Keywords: FDI motivations; FDI determinants; Good governance; CEE countries; Panel data analysis (search for similar items in EconPapers)
Date: 2019
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Persistent link: https://EconPapers.repec.org/RePEc:spr:prbchp:978-3-030-17215-2_7

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DOI: 10.1007/978-3-030-17215-2_7

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