Business environment and foreign direct investments – the case of European emerging economies

Mladen Vuckovic, Vito Bobek, Anita Macek, Hazbo Skoko, Tatjana Horvat

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Abstract

Globalization process of the world economy has led to increase of international capital mobility. In recent two decades, the level of foreign direct investments (FDI) is significantly raised and in 2017 was 1.8 trillion US dollars. The question that is occupying attention in economic literature is what are the main motives and determinants of FDI in certain countries. This paper aims to explore what are the linkages between business environment and inward FDI. The research was performed on the sample of five European emerging economies, located in Central and Eastern Europe – Poland, Slovenia, Bulgaria, Romania and Serbia. The research compared the main tendencies of FDIs in selected economies, institutional framework and reforms during transition process, competitiveness and ease of doing business. With the quantitative analysis and OLS regression authors tried to identify statistical significant linkages between inward FDI and ease of doing business indicators, where control variables were GCI pillars (relevant for business regulation and institutional framework), macroeconomic performances, market capitalization and taxation. The results are identified factors of business environment relevant for attraction of FDI and provided empirical model for each country respectively.
Original languageEnglish
Article number33:1
Pages (from-to)243-266
Number of pages28
JournalEconomic Research-Ekonomska Istrazivanja
Volume33
Issue number1
DOIs
Publication statusPublished - 27 Feb 2020

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