Globalization and FDIs: determinants and competition effects in Central and Eastern European Countries

Natalia Vechiu (1)

1 CATT - Centre d'Analyse Théorique et de Traitement des données économiques

Based on a new economic geography model and gravity theory, this article analyzes FDI determinants in the CEECs and competition effects in terms of inward FDIs under increasing economic integration. Applying different econometric techniques (fixed effects, PQML), the results show that market potential and communications infrastructure are more important FDI determinants than wages in the CEECs. Also, they confirm competition effects triggered by Chinese and Southern Europe relative communication costs. We find weak evidence for wage competition effects.

Domaines: Economies et finances; Économie et finance quantitative [q-fin]

Natalia Vechiu. Globalization and FDIs: determinants and competition effects in Central and Eastern European Countries. 2011. ⟨hal-02948133⟩