Why Does Fdi Go Where it Goes? New Evidence From the Transition Economies

Author/Editor:

Yuko Kinoshita ; Nauro F. Campos

Publication Date:

November 1, 2003

Electronic Access:

Free Download. Use the free Adobe Acrobat Reader to view this PDF file

Disclaimer: This Working Paper should not be reported as representing the views of the IMF.The views expressed in this Working Paper are those of the author(s) and do not necessarily represent those of the IMF or IMF policy. Working Papers describe research in progress by the author(s) and are published to elicit comments and to further debate

Summary:

This 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, we find that the main determinants are institutions, agglomeration, and trade openness. We find important differences between the Eastern European and Baltic countries, on the one hand, and the CIS countries on the other: in the latter group, natural resources and infrastructure matter, while agglomeration matters only for the former group.

Series:

Working Paper No. 03/228

Subject:

English

Publication Date:

November 1, 2003

ISBN/ISSN:

9781451875461/1018-5941

Stock No:

WPIEA2282003

Format:

Paper

Pages:

32

Please address any questions about this title to publications@imf.org