THE ROLE OF INSTITUTIONS’QUALITY IN ENHANCING FDI INFLOWS IN CENTRAL AND EASTERN EUROPE AND NORTH AFRICA
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Authors:
• Oana Cristina POPOVICI, email: oana.c.popovici@gmail.com, Afiliation: Institute for Economic Forecasting, Romanian Academy
• Adrian Cantemir CĂLIN, email: cantemircalin@ipe.ro, Afiliation: Institute for Economic Forecasting, Romanian AcademyPages:
• 40|58 -
Keywords: oreign direct investment, institutions’ quality, Central and Eastern European countries, North Africa
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Abstract:
The aim of this paper is to assess the impact of institutions’ quality on FDI inflows in two groups of countries in Central and Eastern Europe and North Africa. We test if the Worldwide Governance Indicators are significant factors that investors take into account when deciding their location’s investment. In this respect, we use the panel data methodology for the period 2002-2015. We find that only regulatory quality has a significant impact for FDI inflows in both groups of countries, while traditional determinants, such as the GDP level, are still important for the European economies. For the countries in North Africa, it is possible that the harnessing of natural and capital endowment could be more attractive than the development level or the market dimension, once the agreement between the state and the foreign investor is made.
