Foreign Investment Location And Institutional Development In Transition Economies
- Topics:
- Foreign Direct Investment
- Tags:
- Currency & Foreign Exchange,
- Elsevier,
- Finance,
- Foreign Direct Investment,
- Foreign Direct Investment (FDI),
- Investment
- Source:
- Elsevier
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Overview: Institutions are widely regarded as a crucial locational advantage of host countries aiming to attract foreign investors. However, there is little agreement on which institutions matter, and why. This paper contributes to filling this gap by analyzing the impact of different dimensions of the newly created institutional framework in East European transition economies on Foreign Direct Investment (FDI). Using a dataset detailing FDI flows from individual market economies to transition ones, the relationship between institutional development and FDI inflow had examined. The authors found that FDI is positively related to the quality of formal institutions, though an impact from informal institutions can only be shown for the special case of Russia, which has suffered from a gap between the extensiveness and effectiveness of legal reform.
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Format: PDF | Size: 186KB | Date: Dec 2003 | Pages: 22
