Munich Personal RePEc Archive

What drives foreign direct investment into post-communist economies?

Salahodjaev, Raufhon and Yuldashev, Oybek and Omanbayev, Bekhzod (2016): What drives foreign direct investment into post-communist economies?

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Abstract

This study explores the factors that attract foreign direct investment (FDI) in Post-Communist countries. To do so, for the first time in the extant literature on ex-communist countries, we use panel data over the period 1990-2015. The key findings are as follows: (a) the rate of return and enrollment in education and cost of fuel are negatively associated with FDI inflows to Post-Communist countries; and (b) there is a positive link between FDI inflows to the region and stability of political regime and rule of law; (c) our estimates further confirm the market seeking hypothesis for the nature of FDI to the Post-Communist countries.

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