Preliminary communication

THE ROLE OF ECONOMIC AND POLITICAL FREEDOMS IN ATTRACTING FOREIGN DIRECT INVESTMENTS: THE CASE OF SOUTHEAST EUROPE

Hasan Mahmutović orcid.org/0000-0003-3089-9531

Abstract

The aim of this research is to empirically explore impact of economic and political f reedom as
two nontraditional factors on FDI inflows in eight of South East Europe countries between 2002
and 2020. Accordingly, the study hypothesis that high level of economic and political freedom is
positively associated with FDI.The study uses panel data techniques. The obtained f indings of
the study failed to confirm contribution of economic freedom on FDI in eight South East
European countries. It can be explained that a given level of reforms conducted in the f ield of
business freedom, trade freedom, monetary freedom, investment freedom, government size,
property rights, freedom from corruption, labour freedom, financial freedom, and fiscal freedom
are still lagging from developed countries. On the contrary, the findings confirmed the impact of political freedom on FDI attractiveness and that given level of political freedom contributes to growth of FDI.

Keywords

: Economic and political freedom, FDI, panel data techniques, South East Europe

Hrčak ID:

313781

URI

https://hrcak.srce.hr/313781

Publication date:

25.1.2024.

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