Why Does Fdi Go Where it Goes? New Evidence From the Transition Economies
IMF Working Papers, November 1, 2003
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- Why Does Fdi Go Where it Goes? New Evidence From the Transition Economies
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Bibliographic details
- Authors: Yuko Kinoshita, Nauro F. Campos
- Published: November 1, 2003
- Series: IMF Working Papers
- DOI: https://doi.org/10.5089/9781451875461.001
Summary findings
- The paper examines the importance of agglomeration economies and institutions vis-a-vis initial conditions and factor endowments in explaining the locational choice of foreign investors.
- Using a unique panel data set for 25 transition economies between 1990 and 1998, the main determinants of FDI location are identified as:
- institutions,
- agglomeration, and
- trade openness.
Regional differences and key drivers
- Important differences are found between Eastern European and Baltic countries, on the one hand, and the CIS countries, on the other:
- For Eastern European and Baltic countries:
- agglomeration matters.
- For CIS countries:
- natural resources and infrastructure matter,
- agglomeration does not emerge as a main determinant.
Subject categories and keywords (as listed)
- Subject: Balance of payments, Econometric analysis, Environment, Estimation techniques, Financial institutions, Foreign direct investment, Labor, Labor costs, Natural resources, Stocks
- Keywords: Asia and Pacific, CIS country, country FDI flow, Eastern Europe, Estimation techniques, FDI flow, FDI inflow, FDI motive, FDI stock, foreign direct investment, Labor costs, natural resource, Natural resources, Stocks, transition economies, WP