The interaction between Foreign Direct Investment and Domestic Investment: Is there crowding out effect?

Author:

Akin Tugba,Avcı Ozge Bolaman

Abstract

After the fall of communism, Central and Eastern European countries have experienced a transition process in which a remarkable increase is observed in foreign direct investment flows into the region. During this process, when transition countries tried to adopt a free-market economy instead of a closed centrally structured economy, funds obtained through FDI constituted an essential way of financing for these countries that were trying to restructure their economy. Study questions the existence of the crowding-out effect by using data from Eastern European Countries, including Romania, the Russian Federation, Moldova, Poland, Bulgaria, Hungary, Slovak Republic, Ukraine. With this aim, PANIC Bai and Ng (2004), the bias-corrected PANIC Westerlund and Larsson (2009) unit root tests, and panel data analysis are implemented. Results obtained were consistent with theoretical expectations and showed that FDI had a crowding-out effect in the short run but, in the long run, a crowding-in impact on domestic investment.

Publisher

Journal of Eastern European and Central Asian Research

Subject

Marketing,Organizational Behavior and Human Resource Management,Strategy and Management,Economics and Econometrics,Finance,Business and International Management

Cited by 2 articles. 订阅此论文施引文献 订阅此论文施引文献,注册后可以免费订阅5篇论文的施引文献,订阅后可以查看论文全部施引文献

1. The impact of EMU integration on GDP and productivity in the Baltic countries;Journal of Eastern European and Central Asian Research (JEECAR);2022-12-03

2. IMPACT OF OWNERSHIP CONCENTRATION ON THE INNOVATION OF SMALL AND MEDIUM-SIZED ENTERPRISES;Polish Journal of Management Studies;2022-06

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