The Implications of Foreign Direct Investment for Development in Transition Countries: Challenges for the Croatian Economy

Šohinger, Jasminka; Harrison, Glenn W.

doi:10.1080/00128775.2004.11041069

Cited by 9 publications

(10 citation statements)

References 3 publications

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“…It is true that much of the FDI that has come into transition economies has been used to purchase existing firms rather than to finance new greenfield investments. Nevertheless, even FDI through mergers and acquisitions has a positive effect on domestic capital formation (Šohinger and Harrison, 2004) because investors do contribute additional capitalization to their acquisitions. Moreover, as Hunya (1996) shows in the case of Hungary, foreign firms have higher profits and reinvest a much higher share of it than do domestically‐owned firms, thus increasing capital formation in the future.…”

Section: Conclusion and Policy Implicationsmentioning

confidence: 99%

The effects of transition and political instability on foreign direct investment inflows

Brada¹,

Kutan²,

Yigit³

2006

Economics of Transition

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This paper examines the effects of transition and of political instability on foreign direct investment (FDI) flows to the transition economies of Central Europe, the Baltics and the Balkans. We find that FDI flows to transition economies unaffected by conflict and political instability exceed those that would be expected for comparable West European countries. Success with stabilization and reform increased the volume of FDI inflows. In the case of Balkan counties, conflict and instability reduced FDI inflows below what one would expect for comparable West European countries, and reform and stabilization failures further reduced FDI to the region. Thus, we find that the economic costs of instability in the Balkans in terms of foregone FDI have been quite high.JEL classifications: F21, F23, P52.

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Section: Conclusion and Policy Implicationsmentioning

confidence: 99%

The effects of transition and political instability on foreign direct investment inflows

Brada¹,

Kutan²,

Yigit³

2006

Economics of Transition

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“…More recent studies, such as those by Makki and Somwaru (2004) and Nair-Reichert and Weinhold (2001), find a causal relation that runs from FDI and trade to economic growth in large samples of developing countries. A host of country case studies also suggest a positive effect of FDI on growth, such as those by Sohinger and Harrison (2004) and Walkenhorst (2004). Many other studies of non-MENA countries examine the effect of FDI on economic growth, such as those by Altomonte and Guagliano (2003), Andreff (2002), Bhaumik and Gelb (2005), Damijan et al (2003), Frenkel et al (2004), Grogan and Moers (2001), Li et al (2001), and Rutkowski (2006 Supported by the growing empirical evidence that asserts a positive contribution of FDI on exports and growth, perspectives on FDI have shifted toward greater accommodation.…”

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confidence: 96%

Foreign Direct Investment and LDC Exports: Evidence from the MENA Region

AbuAl-Foul

Soliman

2008

Emerging Markets Finance and Trade

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This paper examines the effect of foreign direct investment (FDI) on manufacturing exports in four Middle Eastern and North African (MENA) countries. The sensitivity of merchandise exports, manufacturing exports, and the share of manufacturing exports in total merchandise exports to two measures of FDI activity is tested using panel data spanning 1975-2003. The findings suggest that FDI activity positively affects the host country's merchandise and manufacturing exports. Nevertheless, FDI activity is still short of generating any increase in the share of manufacturing exports in merchandise exports.

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“…Much of the FDI that came into transition economies has been used to purchase existing firms rather than to finance new Greenfield investments (Brada et al, 2006); however, even FDI used for mergers and acquisitions has a positive effect on domestic capital formation (Šohinger and Harrison, 2004) because investors do contribute additional capital to their acquisitions. Moreover, as Hunya (1996) shows in the case of Hungary, foreign firms have higher profits and reinvest a much higher share of it than do domestically owned firms, thus increasing capital formation in the future.…”

Section: Theoretical Frameworkmentioning

confidence: 99%

European integration, productivity growth and real convergence: Evidence from the new member states

Kutan

Yigit

2009

Economic Systems

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We estimate the determinants of labor productivity growth in 8 new European Union (EU) member states that joined the Union in 2004. Our focus is on the impact of globalization and EU integration efforts on labor productivity growth. Previous studies test the impact of trade using either exports or trade openness. We also test the impact of imports separately on labor productivity growth. Using panel data for 1995-2006 period, we find that globalization has mixed effects. FDI and exports improve productivity, but imports hurt it. Regarding domestic variables, we find that human capital is the most important source of labor productivity growth in the new member states. There is also considerable adjustment of labor productivity towards EU15 levels, indicating significant "catching up" and hence real convergence. Policy implications of the findings are also discussed. © 2009 Elsevier B.V. All rights reserved

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The Implications of Foreign Direct Investment for Development in Transition Countries: Challenges for the Croatian Economy

Cited by 9 publications

References 3 publications

The effects of transition and political instability on foreign direct investment inflows

The effects of transition and political instability on foreign direct investment inflows

Foreign Direct Investment and LDC Exports: Evidence from the MENA Region

European integration, productivity growth and real convergence: Evidence from the new member states

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