IDEAS home Printed from https://ideas.repec.org/p/pra/mprapa/73277.html
   My bibliography  Save this paper

What drives foreign direct investment into post-communist economies?

Author

Listed:
  • Salahodjaev, Raufhon
  • Yuldashev, Oybek
  • Omanbayev, Bekhzod

Abstract

This study explores the factors that attract foreign direct investment (FDI) in Post-Communist countries. To do so, for the first time in the extant literature on ex-communist countries, we use panel data over the period 1990-2015. The key findings are as follows: (a) the rate of return and enrollment in education and cost of fuel are negatively associated with FDI inflows to Post-Communist countries; and (b) there is a positive link between FDI inflows to the region and stability of political regime and rule of law; (c) our estimates further confirm the market seeking hypothesis for the nature of FDI to the Post-Communist countries.

Suggested Citation

  • Salahodjaev, Raufhon & Yuldashev, Oybek & Omanbayev, Bekhzod, 2016. "What drives foreign direct investment into post-communist economies?," MPRA Paper 73277, University Library of Munich, Germany.
    • Handle: RePEc:pra:mprapa:73277
    as

    Download full text from publisher

    File URL: https://mpra.ub.uni-muenchen.de/73277/1/MPRA_paper_73277.pdf
    File Function: original version
    Download Restriction: no
    ---><---

    References listed on IDEAS

    as
    1. Globerman, Steven & Shapiro, Daniel, 2002. "Global Foreign Direct Investment Flows: The Role of Governance Infrastructure," World Development, Elsevier, vol. 30(11), pages 1899-1919, November.
    2. David W Loree & Stephen E Guisinger, 1995. "Policy and Non-Policy Determinants of U.S. Equity Foreign Direct Investment," Journal of International Business Studies, Palgrave Macmillan;Academy of International Business, vol. 26(2), pages 281-299, June.
    3. Xose Rodriguez & Julio Pallas, 2008. "Determinants of foreign direct investment in Spain," Applied Economics, Taylor & Francis Journals, vol. 40(19), pages 2443-2450.
    4. Carstensen, Kai & Toubal, Farid, 2004. "Foreign direct investment in Central and Eastern European countries: a dynamic panel analysis," Journal of Comparative Economics, Elsevier, vol. 32(1), pages 3-22, March.
    5. John C. Anyanwu & Nadege D. Yameogo, 2015. "What Drives Foreign Direct Investments into West Africa? An Empirical Investigation," African Development Review, African Development Bank, vol. 27(3), pages 199-215, September.
    6. John H. Dunning & Sarianna M. Lundan, 2008. "Multinational Enterprises and the Global Economy, Second Edition," Books, Edward Elgar Publishing, number 3215.
    7. Kevin Honglin Zhang, 2001. "What Attracts Foreign Multinational Corporations To China?," Contemporary Economic Policy, Western Economic Association International, vol. 19(3), pages 336-346, July.
    8. John Anyanwu, 2011. "Working Paper 136 - Determinants of Foreign Direct Investment Inflows to Africa, 1980-2007," Working Paper Series 327, African Development Bank.
    9. John H Dunning, 1998. "Location and the Multinational Enterprise: A Neglected Factor?," Journal of International Business Studies, Palgrave Macmillan;Academy of International Business, vol. 29(1), pages 45-66, March.
    10. John Dunning, 1981. "Explaining the international direct investment position of countries: Towards a dynamic or developmental approach," Review of World Economics (Weltwirtschaftliches Archiv), Springer;Institut für Weltwirtschaft (Kiel Institute for the World Economy), vol. 117(1), pages 30-64, March.
    11. Pantelis Pantelidis & Efthymios Nikolopoulos, 2008. "FDI Attractiveness in Greece," International Advances in Economic Research, Springer;International Atlantic Economic Society, vol. 14(1), pages 90-100, February.
    12. James R. Markusen & Keith E. Maskus, 2001. "General-Equilibrium Approaches to the Multinational Firm: A Review of Theory and Evidence," NBER Working Papers 8334, National Bureau of Economic Research, Inc.
    13. Nuno Carlos LEITÃO, 2010. "Localization Factors and Inward Foreign Direct Investment in Greece," Theoretical and Applied Economics, Asociatia Generala a Economistilor din Romania / Editura Economica, vol. 6(6(547)), pages 17-26, June.
    14. Laura CASI & Laura RESMINI, 2010. "Evidence on the determinants of foreign direct investment: the case of EU regions," Eastern Journal of European Studies, Centre for European Studies, Alexandru Ioan Cuza University, vol. 1, pages 93-118, December.
    15. Axel Dreher, 2006. "Does globalization affect growth? Evidence from a new index of globalization," Applied Economics, Taylor & Francis Journals, vol. 38(10), pages 1091-1110.
    16. Asiedu, Elizabeth & Lien, Donald, 2011. "Democracy, foreign direct investment and natural resources," Journal of International Economics, Elsevier, vol. 84(1), pages 99-111, May.
    17. Xiaozu Wang & Lixin Colin Xu & Tian Zhu, 2012. "Foreign direct investment under a weak rule of law," The Economics of Transition, The European Bank for Reconstruction and Development, vol. 20(3), pages 401-424, July.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Katarzyna Piwowar-Sulej, 2022. "Sustainable development and national cultures: a quantitative and qualitative analysis of the research field," Environment, Development and Sustainability: A Multidisciplinary Approach to the Theory and Practice of Sustainable Development, Springer, vol. 24(12), pages 13447-13475, December.
    2. Polyxeni, Kechagia & Theodore, Metaxas, 2019. "An empirical investigation of FDI inflows in developing economies: Terrorism as a determinant factor," The Journal of Economic Asymmetries, Elsevier, vol. 20(C).

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Ramírez-Alesón, Marisa & Fleta-Asín, Jorge, 2016. "Is the Importance of Location Factors Different Depending on the Degree of Development of the Country?," Journal of International Management, Elsevier, vol. 22(1), pages 29-43.
    2. Eric Evans Osei Opoku & Alex O. Acheampong & Janet Dzator & Nana Kwabena Kufuor, 2022. "Does environmental sustainability attract foreign investment? Evidence from developing countries," Business Strategy and the Environment, Wiley Blackwell, vol. 31(7), pages 3542-3573, November.
    3. Esiyok, Bulent, 2011. "Determinants of foreign direct investment in Turkey: a panel study approach," MPRA Paper 36568, University Library of Munich, Germany.
    4. John C. Anyanwu, 2012. "Why Does Foreign Direct Investment Go Where It Goes?: New Evidence From African Countries," Annals of Economics and Finance, Society for AEF, vol. 13(2), pages 425-462, November.
    5. Aurora A.C. Teixeira & Rosa Forte & Susana Assunção, 2017. "Do countries' endowments of non-renewable energy resources matter for FDI attraction? A panel data analysis of 125 countries over the period 1995–2012," International Economics, CEPII research center, issue 150, pages 57-71.
    6. Annageldy Arazmuradov, 2012. "Foreign Aid, Foreign Direct Investment, and Domestic Investment Nexus in Landlocked Economies of Central Asia," Economic Research Guardian, Mutascu Publishing, vol. 2(1), pages 129-151, May.
    7. Olawumi D Awolusi & Theuns G Pelser & Adedeji Saidi Adelekan, 2016. "Determinants of Foreign Direct Investment: New Granger Causality Evidence from Asian and African Economies," Journal of Economics and Behavioral Studies, AMH International, vol. 8(1), pages 104-119.
    8. Yanfeng Liu & Xue Li & Xiaonan Zhu & Min-Kyu Lee & Po-Lin Lai, 2023. "The theoretical systems of OFDI location determinants in global north and global south economies," Palgrave Communications, Palgrave Macmillan, vol. 10(1), pages 1-13, December.
    9. Nielsen, Bo Bernhard & Asmussen, Christian Geisler & Weatherall, Cecilie Dohlmann, 2017. "The location choice of foreign direct investments: Empirical evidence and methodological challenges," Journal of World Business, Elsevier, vol. 52(1), pages 62-82.
    10. Gnangnon, Sèna Kimm, 2018. "Effect of multilateral trade liberalization on foreign direct investment outflows amid structural economic vulnerability in developing countries," Research in International Business and Finance, Elsevier, vol. 45(C), pages 15-29.
    11. Alvaro Cuervo-Cazurra & Bernardo Silva-Rêgo & Ariane Figueira, 2022. "Financial and fiscal incentives and inward foreign direct investment: When quality institutions substitute incentives," Journal of International Business Policy, Palgrave Macmillan, vol. 5(4), pages 417-443, December.
    12. Ronald S Wall & Martijn J Burger & G A (Bert) van der Knaap, 2011. "The Geography of Global Corporate Networks: The Poor, the Rich, and the Happy Few Countries," Environment and Planning A, , vol. 43(4), pages 904-927, April.
    13. Diouf Modou & Liu Hai Yun, 2017. "An Empirical Investigation of Causal Relationship of Chinese FDI to African Economies," International Journal of Academic Research in Business and Social Sciences, Human Resource Management Academic Research Society, International Journal of Academic Research in Business and Social Sciences, vol. 7(3), pages 199-207, March.
    14. Olawumi Dele Awolusi, 2019. "Policy and Non-Policy Factors: What Determines Foreign Direct Investments in Africa?," Journal of Social and Development Sciences, AMH International, vol. 9(4), pages 49-61.
    15. Yao‐Yu Chih & Ruby P. Kishan & Andrew Ojede, 2022. "Be good to thy neighbours: A spatial analysis of foreign direct investment and economic growth in sub‐Saharan Africa," The World Economy, Wiley Blackwell, vol. 45(3), pages 657-701, March.
    16. Paul, Justin & Feliciano-Cestero, María M., 2021. "Five decades of research on foreign direct investment by MNEs: An overview and research agenda," Journal of Business Research, Elsevier, vol. 124(C), pages 800-812.
    17. Choi, Gunae, 2022. "Determinants of target location selection for acquirers in the manufacturing sector: Pollution intensity, policy enforcement, and civic environmentalism," Journal of Business Research, Elsevier, vol. 146(C), pages 308-324.
    18. Nguyen Thi Tuong Anh & Hung Quang Doan & Tuan Anh Bui & Nam Hoang Vu & Duong Thuy Thanh Le, 2022. "A Revisit of Motives for Chinese Outward Foreign Direct Investment: The Role of the Institution in Host Countries," SAGE Open, , vol. 12(4), pages 21582440221, December.
    19. Dimitra Mitsi & Constantina Kottaridi, 2022. "Fiscal and non-fiscal institutional context effects and foreign direct investment: empirical evidence in developing countries," SPOUDAI Journal of Economics and Business, SPOUDAI Journal of Economics and Business, University of Piraeus, vol. 72(1-2), pages 11-33, January-J.
    20. Peter J. Buckley, 2018. "Towards a theoretically-based global foreign direct investment policy regime," Journal of International Business Policy, Palgrave Macmillan, vol. 1(3), pages 184-207, December.

    More about this item

    Keywords

    FDI; determinants; Post-Communist; rule of law; democracy; market seeking.;
    All these keywords.

    JEL classification:

    • F2 - International Economics - - International Factor Movements and International Business

    NEP fields

    This paper has been announced in the following NEP Reports:

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:pra:mprapa:73277. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Joachim Winter (email available below). General contact details of provider: https://edirc.repec.org/data/vfmunde.html .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.