Browsing by Organization "Helsingfors universitet, Institutionen för ekonomi och politik: Ekonomisk och social historia"

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  • Balkarova, Laura (2010)
    Outward FDI from the transition countries (with an exception of the Russian Federation) does not appear to have received much attention from the researchers so far, which has been largely attributed to its small share in the world OFDI. Nevertheless, the internationalisation activities of the enterprises originating in transition economies other than Russia have intensified since the mid-1990s. This paper represents an empirical attempt to analyse the home country determinants of OFDI from the selected transition countries. It assesses the importance of different domestic macroeconomic and institutional indicators in shaping the dynamics of OFDI in 23 transition countries over the 1996 – 2007 period. A number of fixed effects panel data regression specifications are introduced in this study in order to evaluate the impact of these indicators on OFDI from the given countries. In addition, the paper refers to the investment development paths of several transition countries that have been characterised by the significant share of their OFDI stock in domestic GDP over the recent years. The data used are extracted from the UNCTAD Handbook of Statistics 2009, World Development Indicators (April 2010), the International Financial Statistics (IMF) Database (August 2010), the UNECE Statistical Database, the EBRD transition reports, the Quality of Government Institute’s Database and many other additional sources. The results of this study indicate that the role of the home country factors in pushing OFDI has been relevant in transition countries as nowhere else, and partially reveal the “system-escape dimension” in OFDI that has emanated from the given countries during the 1996 – 2007 period. In conclusion, the recommendations for the respective governments’ policies towards OFDI are provided.
  • Zoronjic, Belkisa (2010)
    The paper focuses on unveiling the determinants affecting the volumes of FDI inflows to the transition countries. Particular attention is devoted to the macroeconomic and institutional factors in host economies, in terms of economic development, which serve as incentives for investors to enter a certain market. In particular, the paper concentrates on exploring regional characteristics of different ‘blocks’ across transition countries and finding out in which way these characteristics affect FDI inflows. The data for the research have been assembled from various publicly available sources – namely from World Bank World Development Indicators, World Bank World Governance Indicators, European Bank for Reconstruction and Development, Heritage Foundation, United Nations Conference on Trade and Development and United Nations Economics Commission for Europe. The research is undertaken in two steps. First, cluster analysis is applied, through which countries are grouped by their common features. The detailed description of each cluster is presented with the focus on the legal framework of the countries in the clusters. Based on the results of the cluster analysis, dummy variables representing clusters are included in the dataset. Panel regression analysis is further employed to all transition countries over the period from 1996 to 2007, except Montenegro, which is excluded due to the lack of data. Through the Cluster analysis, the four distinct groups are determined across the sample, mostly based on the institutional framework and market size of the countries. The first group represents countries with the strengthened legal framework, where transition process is at the advance stage. That is why it is chosen to be the reference group. The second one consists of the countries with the middle size markets and institutions that require certain improvements. Countries with quite weak institutions and small market size are included in the third cluster. This group is characterised by the relatively high GDP growth rates. The fourth group consists of the countries with the largest market size, which represents the main driving force for the foreign investments. Results of the regression analysis suggest that main determinants of Inward FDI in transition countries are market size presented by the GDP per capita and institutional variables, namely Rule of Law and Business Freedom. In addition, Openness of the Economy has shown to be significant determinant of Inward FDI. It has been proved that dummy variable for the third group is statistically significant, which means that belonging to a certain cluster has an impact on the FDI inflows. Significance of the dummy variable for the second group is not robust. Overall, results confirm the thesis hypothesis that determinants of FDI inflows differ across the clusters.