Acta academica karviniensia 2014, 14(4):77-87 | DOI: 10.25142/aak.2014.069

RELATIONSHIP BETWEEN FOREIGN DIRECT INVESTMENT AND DOMESTIC INVESTMENT IN CENTRAL AND EASTERN EUROPE DEPENDING ON OPENNESS OF THE ECONOMY

Zuzana Szkorupová
Slezská univerzita, Obchodně podnikatelská fakulta, Univerzitní nám. 1934/3,733 40 Karviná, Email:szkorupova@opf.slu.cz

Foreign direct investment is discussed on various levels. Basically we speak about positive and negative effects that might be expressed directly or indirectly. In evaluating the impact of foreign direct investment on development, however, a key question is whether foreign direct investment crowd in domestic investment, or foreign direct investment crowd out domestic investment. This paper focuses on research of FDI effects in Central and Eastern Europe. The aim of this paper is to examine whether foreign direct investment in selected countries of Central and Eastern Europe crowds in or crowds out domestic investment. For this purpose we apply theoretical model of investment that includes foreign direct investment as an exogenous variable. Annual data were tested with panel regression with fixed effects for the period 1993 - 2011. Detected results indicate that in all specified areas, the effect of extrusion of domestic investments prevails.

Keywords: foreign direct investment, domestic investment, crowding out effect, crowding in effect, panel data analysis, Central and Eastern Europe
JEL classification: F21, F23

Received: July 21, 2014; Accepted: February 11, 2015; Published: December 30, 2014  Show citation

ACS AIP APA ASA Harvard Chicago Chicago Notes IEEE ISO690 MLA NLM Turabian Vancouver
Szkorupová Z. RELATIONSHIP BETWEEN FOREIGN DIRECT INVESTMENT AND DOMESTIC INVESTMENT IN CENTRAL AND EASTERN EUROPE DEPENDING ON OPENNESS OF THE ECONOMY. Acta academica karviniensia. 2014;14(4):77-87. doi: 10.25142/aak.2014.069.
Share...
Download citation
  • BibTeX (.bib)
  • Bookends (.ris)
  • EasyBib (.ris)
  • EndNote (.enw)
  • EndNote 8 (.xml)
  • ISI WoS (.isi)
  • Medlars (.medlars)
  • Mendeley (.ris)
  • MODS (.xml)
  • Papers (.ris)
  • RefWorks (.txt)
  • RefManager (.ris)
  • RIS (.ris)
  • MS Word (.xml)
  • Zotero (.ris)
    • Open full article

    References

    1. AGOSIN, R. M. a R. MACHADO, 2005. Foreign Investment in Developing Countries: Does it Crowd in Domestic Investment? Oxford Development Studies, 33(2), 149-162. ISSN 1360-0818. Go to original source...
    2. AGOSIN, R. M. a R. MAYER, 2000. Foreign Investment in Developing Countries - Does it Crowd in Domestic Investment? Discusion Paper No. 146. Geneva: UNCTAD.
    3. DJANKOV, S. a B. HOEKMAN, 2000. Foreign Investment and Productivity Growth in Czech Enterprises. World Bank Economic Review, 14(1), 49-64. ISSN 1564-698X. Go to original source...
    4. GÖRG, H. a D. GREENAWAY, 2002. Much Ado about Nothing?Do Domestic Firms Really Benefit from Foreign Investment? Discusion Paper No. 3485. London: CEPR. Go to original source...
    5. KINDLEBERGER, C. P., 1969. American Business Abroad: Six Lectures on Direct Investment. New Haven: Yale Univesity Press. ISBN 978-0300010855.
    6. KOHOUT, P., 2005. Zahraniční investice: úspěch nebo fiasko. Lidové noviny [online]. 03. říjen 2005 [vid. 18. červen 2014]. Dostupné z: http://pavelkohout.blogspot.com/search?q=p%C5%99%C3%ADm%C3%A9+zahrani%C4%8Dn%C3%AD+investice
    7. LALL, S. a P. STREETEN, 1977. Foreign Investment, Transnationals and Developing Countries. New York: Palgrave Macmillan. ISBN 978-0333168981. Go to original source...
    8. MI©UN, J. a V. TOM©ÍK, 2002. Přímé zahraniční investice ve střední Evropě: vytěsňují nebo vtahují domácí investice? Politická ekonomie, 2002(2), 251-260. ISSN 0032-3233. Go to original source...
    9. MORRISSEY, O. a M. UNDOMKERDMONGKOL, 2008. Political Regime, Private Investment, and Foreign Direct Investment in Developming Countries. Research Paper, No. 109. Helsinki: UNU-WIDER.
    10. NEWFARMER, R. S. a W. F. MUELLER, 1975. Multinational Corporations in Brazil and Mexico: Structural Sources of Economic and Non-economic Market Power. Washington: US Government Printing Office. ASIN B006ZRM8Q6.
    11. PETROCHILOS, G., 1989. Foreign Direct Investment and the Development Process: The Case of Greece. Aldershot: Avebury. ISBN 978-0566071088.
    12. RADO©EVIČ, S., 2002. The Electronics Inudstry in Central and Eastern Europe: an Emerging Production Location in the Alignment of Networks Perspective. Working paper, No. 21. London: SSEES.
    13. REUBER, G et al., 1973. Private Foreign Investment in Dvelopment. Oxford: Clarendon Press and OECD. ISBN 978-0198281962.
    14. ROUBÍČKOVÁ, M., 2012. Vliv institucionálního sektoru na vývoj vybraných ukazatelů. Scientific Paper of the University of Pardubice, XIX(25), 147-156. ISSN 1211-555X.
    15. SRHOLEC, M., 2004. Přímé zahraniční investice v České republice, Teorie a praxe v mezinárodním srovnání. Praha: Linde. ISBN 80-86131-52-1.
    16. TITARENKO, D., 2006. The Influence of Foreign Direct Investment on Domestic Investment Processes in Latvia. Transport and Telecomunication, 7(1), 76-83. ISSN 1407-616.

    Return to the content