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Does FDI Crowd out Domestic Investment in Transition Countries?

Cristina Jude ()

Working Papers from HAL

Abstract: The aim of this paper is to empirically test the hypothesis of FDI led capital accumulation in Central and Eastern European countries. More precisely, we investigate the relationship between FDI and local investment, using a sample of 10 CEEC over the period 1990-2010. We find FDI to crowd out domestic investment, while the effect decreases with time. Our results also indicate that greenfield FDI may develop long run complementarities with domestic investment, while mergers and acquisitions do not prove any significant effect on domestic investment. Finally, financial development seems to foster a certain crowding-in effect in the case of mergers&acquisitions.

Keywords: investment; FDI; crowding-out; economic transition; financial development (search for similar items in EconPapers)
Date: 2015
New Economics Papers: this item is included in nep-int and nep-tra
Note: View the original document on HAL open archive server: https://halshs.archives-ouvertes.fr/halshs-01252565
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Journal Article: Does FDI crowd out domestic investment in transition countries? (2019) Downloads
Working Paper: Does FDI crowd out domestic investment in transition countries? (2018) Downloads
Working Paper: Does FDI Crowd out Domestic Investment in Transition Countries? (2015) Downloads
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