CAPITAL FORMATION IN THE ECONOMIES OF CENTRAL AND EASTERN EUROPE THROUGH FOREIGN DIRECT INVESTMENT AND ITS MAIN DETERMINANTS: TWENTY YEARS' EXPERIENCE

Yuriy Bilenko


Summary

Defined macroeconomic and institutional factors attracting significant flows of foreign direct investment in the economies of Central and Eastern Europe and performed an econometric estimation of their influence for 15 countries during 1991 - 2011 based on panel regression with random effects. Foreign direct investment in CEE countries is horizontal in nature and focus on the scale of the domestic market. Statistically significant also are next variables: economic growth, reducing the budget deficit, reducingthe difference between deposit and loan rates. Some differentiation is observed between the Member States of the European Union and European post-Soviet countries The analysis of the impact of domestic and foreign investment on economic growth in CEE countries, certainly reduce the effectiveness of FDI. Welfare and development of the internal market - the main factor in FDI inflows to the post-socialist CEE countries; foreign direct investment in post-Soviet countries is mostly speculative and does not contribute to lower interest rates, to improve fiscal balance.

czasopismo PF nr 4-2014.pdf, p. 7