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Does a country’s business regulatory environment affect its attractiveness to FDI? Empirical evidence from Central and Southeast European countries

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  • Mehmed GANIĆ

    (International University of Sarajevo, Bosnia and Herzegovina)

  • Mahir HRNJIC

    (International University of Sarajevo, Bosnia and Herzegovina)

Abstract

The paper squarely concentrates on an examination of the relationship between a country’s business regulatory environment and the inward stock of foreign direct investment (FDI) in fifteen selected countries of Central Eastern and Southeast Europe by using a Mean Group (MG) estimator. The paper found no evidence that a country’s business regulatory environment is a statistically significant predictor of FDI neither in Central Eastern European nor in Southeast European countries. However, the study’s findings recommend that a further increase in FDI in both regions can be achieved by further economic growth, political stability, European Union integration and reduction costs of business regulations.

Suggested Citation

  • Mehmed GANIĆ & Mahir HRNJIC, 2019. "Does a country’s business regulatory environment affect its attractiveness to FDI? Empirical evidence from Central and Southeast European countries," Eastern Journal of European Studies, Centre for European Studies, Alexandru Ioan Cuza University, vol. 10, pages 89-105, December.
    • Handle: RePEc:jes:journl:y:2019:v:10:p:89-105
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    References listed on IDEAS

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