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Government incentives directed towards foreign direct investment: a case of central and eastern europe

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  • Romualdas Ginevičius
  • Agnė Šimelytė

Abstract

This article examines the government incentives towards foreign direct investments (further -- FDI) of Central and Eastern Europe countries by evaluating the external influencing factors of foreign investment. It is argued that the major incentive affecting FDI inflows involves more fiscal than financial incentives. Tax deduction is considered to be the most significant influencing factor on attracting FDI. Hence, the empirical analysis is based on exogenous variables. The empirical model was used to determine causal relationship between macroeconomic variables and FDI intensity in Central and Eastern European countries. The article introduces some policy recommendation for the increase of FDI intensity in Central and Eastern Europe.

Suggested Citation

  • Romualdas Ginevičius & Agnė Šimelytė, 2011. "Government incentives directed towards foreign direct investment: a case of central and eastern europe," Journal of Business Economics and Management, Taylor & Francis Journals, vol. 12(3), pages 435-450, May.
    • Handle: RePEc:taf:jbemgt:v:12:y:2011:i:3:p:435-450
    DOI: 10.3846/16111699.2011.599415
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    References listed on IDEAS

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