What is it about?
This study examines whether the Central and Eastern European financial market development can explain the EU foreign direct investments (FDI) in these countries during 1994–2012. The higher bank credit flows had a positive effect on the FDI in 2005–2012, whereas the stock market size had a positive effect in 1997–2004.
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Why is it important?
The results suggest that the higher banking sector development due to the bank reforms before their EU accession has facilitated the EU FDI in these countries. Moreover, the stock market size has increased because the EU membership announcement has deepened the stock market integration.
Perspectives
The findings of this study can be of interest to the EU scholars and foreign companies interested in making investments in the CEE countries. The CEE bank and stock market development are the crucial factors for current and new foreign investors to make substantial investments in these countries in the long run.
Donny Tang
Read the Original
This page is a summary of: The Determinants of European Union (EU) Foreign Direct Investments in the EU Countries from Central and Eastern Europe During 1994–2012, Comparative Economic Research Central and Eastern Europe, January 2017, De Gruyter,
DOI: 10.1515/cer-2017-0005.
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