Foreign Direct Investment in Southeastern Europe: How (and How Much) Can Policies Help?

32 Pages Posted: 3 Mar 2006

See all articles by Dimitri G. Demekas

Dimitri G. Demekas

Balazs Horvath

International Monetary Fund (IMF) - European Department

Elina Ribakova

International Monetary Fund (IMF)

Yi Wu

International Monetary Fund (IMF) - Policy Development and Review Department

Multiple version iconThere are 2 versions of this paper

Date Written: June 2005

Abstract

Gravity factors explain a large part of Foreign Direct Investment (FDI) inflows in Southeastern Europea region not comprehensively covered before in econometric studiesbut host-country policies also matter. Key are policies that affect relative unit labor costs, the corporate tax burden, infrastructure, and the trade regime. This paper develops the concept of potential FDI for each country, and uses its deviation from actual levels to estimate what policies can realistically be expected to achieve in terms of additional FDI. It also finds evidence that above a certain threshold, the importance of some policies for attracting FDI is distinctly different.

Keywords: Foreign direct investment, Southeastern Europe, transition economies

JEL Classification: C33, F21, O16, P27

Suggested Citation

Demekas, Dimitri G. and Horvath, Balazs and Ribakova, Elina and Wu, Yi, Foreign Direct Investment in Southeastern Europe: How (and How Much) Can Policies Help? (June 2005). IMF Working Paper No. 05/110, Available at SSRN: https://ssrn.com/abstract=887979

Balazs Horvath

International Monetary Fund (IMF) - European Department ( email )

700 19th Street NW
Washington, DC 20431
United States

Elina Ribakova

International Monetary Fund (IMF)

700 19th Street, N.W.
Washington, DC 20431
United States

Yi Wu

International Monetary Fund (IMF) - Policy Development and Review Department ( email )

700 19th St. NW
Washington, DC 20431
United States

No contact information is available for Dimitri G. Demekas

Do you have a job opening that you would like to promote on SSRN?

Paper statistics

Downloads
389
Abstract Views
2,005
rank
93,706
PlumX Metrics