Naslov
The Interrelationship of FDI and GDP in European Transition Countries

Autori
Čičak, Krešimir ; Sorić, Petar

Izvornik
International journal of management science and business administration (1849-5419) 1 (2015), 4; 41-58

Vrsta, podvrsta i kategorija rada
Radovi u časopisima, članak, znanstveni

Ključne riječi
FDI; GDP Growth; Granger Causality; VAR

Sažetak
Theory states that the foreign direct investments (FDI) have multiple positive effects on a country’s economy. Evidence can be sought from Central and Eastern European countries where FDI is seen as one of the main contributors to GDP growth. This paper examines the relationship between FDI and GDP growth rate in Croatia and other chosen European transition countries using bivariate VAR models. Based on the research conducted, it was found that FDI Granger causes GDP growth in most countries. This is especially true in Poland, Czech Republic and Hungary which have attracted a significant amount of FDI starting from 1990. The estimated VAR models for Latvia and Slovenia provide evidence that GDP causes FDI, corroborating the theory that investor are prone to stable macroeconomic conditions. This paper tries to make a comparative analysis of FDI-GDP link in New EU member states. Further research should certainly include other aspects such as the quality of the legislative system, labor productivity and labor costs, access to capital markets, etc.

Izvorni jezik
Engleski

Znanstvena područja
Ekonomija

POVEZANOST RADA