EFZG working paper series, No. 06, 2009.
Other
Željko Bogdan
; Faculty of Economics and Business, University of Zagreb
Abstract
Economic inefficiency of former socialistic countries fell into multilayer crisis which resulted with
breakdown of socialist system. It was believed that foreign investments inflow will stimulate stronger
growth of these countries. Therefore, analysis of influence of foreign direct investments on economic
growth of selected European transition countries between 1990 and 2005 has been made. Hypothesis that
greater FDI inflow stimulates economic growth of transition countries is tested using panel data analysis.
However, the results did not confirm this hypothesis. It has been shown that FDI influence on growth is
negative, but statistically insignificant. However, macroeconomic stability and economic openness play
statistically significant role on growth. The results also showed that macroeconomic stability and market
size had the strongest impact on FDI inflow.
Keywords
financial integration; transition; FDI; panel analysis
Hrčak ID:
136975
URI
Publication date:
25.5.2009.
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