What is it about?

Data problems and the impact of data selection on study results were often underlined as important barriers to the analysis of driving forces in foreign direct investment (FDI), New data on FDI stocks, broken down according to the nationality of the ultimate owner company, are available for a few countries.

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Why is it important?

We investigate whether new FDI stock data based on the principle of ultimate beneficiary owner’s nationality as opposed to the immediate or direct owner of FDI perform better in analysing the most important factors affecting bilateral FDI stocks using data for Central and Eastern Europe. We show that these new data give better results when analysing the main drivers of bilateral FDI, than the up till now available FDI data, which were broken down according to the nationality of the immediate investor firm


Further research can expand the country group analysed to include not only former transition economies but other OECD countries as well. When data for further years will be available, a panel data analysis may yield better results allowing to analyse the dynamics of FDI and the impacts of changes in the institutional environment on FDI. Furthermore, the role of intermediary countries can be analysed: what are the main determining factors (besides tax optimization) in the selection of intermediary third countries

Professor Imre Ferto
Centre for Economic and Regional Studies, Hungarian Academy of Sciences: Budapest

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This page is a summary of: FDI according to ultimate versus immediate investor countries: which dataset performs better?, Applied Economics Letters, September 2019, Taylor & Francis,
DOI: 10.1080/13504851.2019.1659925.
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