Why Does Fdi Go Where it Goes? New Evidence From the Transition Economies

Download or read book Why Does Fdi Go Where it Goes? New Evidence From the Transition Economies written by Nauro F. Campos and published by International Monetary Fund. This book was released on 2003-11-01 with total page 33 pages. Available in PDF, EPUB and Kindle. Book excerpt: This paper examines the importance of agglomeration economies and institutions vis-a-vis initial conditions and factor endowments in explaining the locational choice of foreign investors. Using a unique panel data set for 25 transition economies between 1990 and 1998, we find that the main determinants are institutions, agglomeration, and trade openness. We find important differences between the Eastern European and Baltic countries, on the one hand, and the CIS countries on the other: in the latter group, natural resources and infrastructure matter, while agglomeration matters only for the former group.