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Exploring the Determinants Attractiveness to Foreign Direct Investments: Do Public Governance, Infrastructure and Macroeconomic Policies Matter?

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  • Adel BOGARI

Abstract

The aim of this paper is to determine the factors that attract Foreign Direct Investments (FDIs) to Central and Eastern European Countries (CEECs) and Southern and Eastern Mediterranean Countries (SEMCs). To this end, this paper tested three variables representing public governance, physical infrastructure and macroeconomic quality, over a ten-year period stretching from 2008 to 2017. The results of the regressions estimated on CEE countries show that entrepreneurs are attracted to this region mainly for governance and infrastructure quality. Macroeconomic policy variables seem to attract less FDIs to these countries. Using aggregated variables, the results of the regressions estimated on SEMCs show that the governance variable becomes statistically significant but retains a low value. The other variables of physical infrastructure and macroeconomic policies seem to be more robust and better explain FDI inflows to this region.

Suggested Citation

  • Adel BOGARI, 2021. "Exploring the Determinants Attractiveness to Foreign Direct Investments: Do Public Governance, Infrastructure and Macroeconomic Policies Matter?," Review of European Studies, Canadian Center of Science and Education, vol. 13(3), pages 1-63, September.
    • Handle: RePEc:ibn:resjnl:v:13:y:2021:i:3:p:63
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    References listed on IDEAS

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    JEL classification:

    • R00 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - General - - - General
    • Z0 - Other Special Topics - - General

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