Advertisement

Effects of the Global Economic Crisis on FDI Inflow in Eastern European Economies: A Panel Data Analysis

  • Taku Suzuki
Chapter

Abstract

Most of the European transition countries joined the EU between 2004 and 2013, and the transition from plan to market in these countries is thought to be complete now. However, we cannot deny the possibility that the integration into the global economy has both good and bad effects, and thus brings an additional reduction of FDI inflows in a state of emergency. In addition, the economic shock may affect countries or areas at different times. In this chapter, using a panel data set composed of EU transition countries and other transition countries, I have confirmed that global economic shocks in recent years have tended to affect FDI inflow with a time lag and are larger in “embedded” countries (i.e. EU members) than in others. In other words, the more deeply a country is embedded in the global economy, the greater (the benefit and) the lagged shock from the global economy will be.

References

  1. Arabi, U. (2010). Implications of global financial and economic crisis on FDI flows: The Indian perspective. Indian Journal of Economics and Business, 9, 731–750.Google Scholar
  2. Bevan, A., & Estrin, S. (2000). The determinants of foreign direct investment in transition economies (Discussion Papers No.2638). London: Centre for Economic Policy Research.Google Scholar
  3. BP. (2016). BP Statistical Review of World Energy June 2016. London: BP p.l.c.Google Scholar
  4. Chiang, T. C., Bang, N. J., & Huimin, L. (2007). Dynamic correlation analysis of financial contagion: Evidence from Asian markets. Journal of International Money and Finance, 26, 1206–1228.CrossRefGoogle Scholar
  5. Edmonds, T. (2010). Financial crisis timeline (Commons Briefing Paper No. SN04991). London: House of Commons.Google Scholar
  6. Koga, M. (2009). The worldwide spread of financial crisis and global activity of banks: Implications from existing studies (Bank of Japan Review No. 2009-J-15). Tokyo: Bank of Japan. (in Japanese).Google Scholar
  7. Ledyaeva, S. (2009). Spatial econometric analysis of foreign direct investment determinants in Russian regions. The World Economy, 32, 643–666.CrossRefGoogle Scholar
  8. Peek, J., & Rosengren, E. (1997). The international transmission of financial shocks: The case of Japan. American Economic Review, 87, 495–505.Google Scholar
  9. Peek, J., & Rosengren, E. (2000). Collateral damage: Effects of the Japanese bank crisis on real activity in the United States. American Economic Review, 90, 30–45.CrossRefGoogle Scholar
  10. Resmini, L. (2000). The determinants of foreign direct investment in the CEECs: New evidence from sectoral patterns. Economics of Transition, 8, 665–689.CrossRefGoogle Scholar
  11. Schmukler, S., Halac, M., & Zoido-Lobaton, P. (2006). Financial globalization, crises, and contagion. In A. Morales Zumaquero (Ed.), International macroeconomics: Recent developments (pp. 207–225). Hauppauge: Nova Science Publishers.Google Scholar
  12. Stoddard, O., & Noy, I. (2015). Fire-sale FDI? The impact of financial crises on foreign direct investment. Review of Development Economics, 19, 387–399.CrossRefGoogle Scholar
  13. Suzuki, T., & Suganuma, K. (2007). FDI to the transition countries and the role of the state. Hitotsubashi Economics, 2, 73–100. (in Japanese).Google Scholar
  14. Ucal, M., Ozcan, K. M., Bilgin, M. H., & Mungo, J. (2010). Relationship between financial crisis and foreign direct investment in developing countries using semiparametric regression approach. Journal of Business Economics and Management, 11, 20–33.CrossRefGoogle Scholar
  15. World Bank (a). Worldwide Governance Indicator. Available at: http://data.worldbank.org/data-catalog/worldwide-governance-indicators
  16. World Bank (b). World Development Indicator. Available at: http://data.worldbank.org/data-catalog/world-development-indicators

Copyright information

© The Author(s) 2017

Authors and Affiliations

  • Taku Suzuki
    • 1
  1. 1.Faculty of EconomicsTeikyo UniversityTokyoJapan

Personalised recommendations