The Determinants Of European Union (EU) Foreign Direct Investments In The EU Countries From Central And Eastern Europe During 1994–2012
Journal Title: Comparative Economic Research. Central and Eastern Europe - Year 2017, Vol 20, Issue 1
Abstract
This study examines whether the CEECs’ financial market development can explain the EU FDI in the CEECs during 1994–2012. The higher bank credit flows had a positive effect on the FDI in 2005–2012. This can be attributed to the major banking sector reforms undertaken before the CEECs’ EU accession. Second, the stock market size had a positive effect in 1997–2004. This is due to the fact that the EU membership announcement facilitated deeper stock market integration. Third, the higher country income, in interaction with a higher bank credit flow, had only a small positive effect in 2005–2012. The higher income CEECs have pursued much deeper bank liberalization through large-scale privatization of state-owned banks. Finally, the higher country income, in interaction with a larger stock market size, had a negative effect in 2005–2012. A possible reason for this is that the EU countries have started to divert their new FDI to the non-EU countries.
Authors and Affiliations
Donny Tang
Keywords
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- EP ID EP322928
- DOI 10.1515/cer-2017-0005
- Views 58
- Downloads 0
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