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Complements or substitutes? New theoretical considerations and empirical evidence on the imports and FDI relationship in Central and Eastern European Countries

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  • Fragkiskos Filippaios
  • Constantina Kottaridi

Abstract

This paper addresses the imperative need to understand the relationship between inward FDI and trade by developing a new conceptual approach and providing empirical evidence. We use an expanded time dataset, from 1992 to 2008 and an enriched dataset of countries, sectors and location factors. In regards to the inward FDI versus imports relationship, results comply with our theoretical formulation and strongly indicate an overall complementarity with each other. In the case of FDI we find strong locational characteristics such as the large market size, the gradual improvement of the macro-environment and finally the quality of labour force to play a positive role.

Suggested Citation

  • Fragkiskos Filippaios & Constantina Kottaridi, 2013. "Complements or substitutes? New theoretical considerations and empirical evidence on the imports and FDI relationship in Central and Eastern European Countries," International Review of Applied Economics, Taylor & Francis Journals, vol. 27(6), pages 766-797, November.
    • Handle: RePEc:taf:irapec:v:27:y:2013:i:6:p:766-797
    DOI: 10.1080/02692171.2013.826633
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    1. Klaus E. Meyer, 1998. "Direct Investment in Economies in Transition," Books, Edward Elgar Publishing, number 1413, December.
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    2. Hu, Gang-Gao, 2021. "Is knowledge spillover from human capital investment a catalyst for technological innovation? The curious case of fourth industrial revolution in BRICS economies," Technological Forecasting and Social Change, Elsevier, vol. 162(C).

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