The effects of foreign direct investment on economic growth of Central and Eastern European countries.
This thesis analyses the effects of FDI on GDP per capita growth rates of selected Central and Eastern European countries in the period 1994 – 2014. The literature on this subject provides mixed empirical evidence, while the environment of these countries is a suitable testing ground for FDI growth effects. These effects are likely to be positive, although depending on countries' absorptive capacities. The theoretical model of a cross-country growth regression forms a basis for an estimation using panel data and as a method, GLS with seemingly unrelated regression assumptions. The study finds a positive, direct impact of FDI inflows on economic growth as hypothesised, while the other hypothesis concerning the conditionality of this impact is not supported by evidence – what is found is a lack of dependence of FDI growth effect on openness and private credit amount and a negative dependence on market institutions’ quality. Size of panels and quality of the data are some of the limitations of this study and further research directions are outlined.
Faculteit der Managementwetenschappen