Does a country’s business regulatory environment affect its attractiveness to FDI? Empirical evidence from Central and Southeast European countries

• Main Authors: Mehmed GANIĆ, Mahir HRNJIC
• Format: Article
• Language: English
• Published: Alexandru Ioan Cuza University of Iasi 2019-12-01
• Series: Eastern Journal of European Studies
• Subjects: business regulatory environment; fdi; transition countries; mean group (mg) estimator; the oli paradigm
• Online Access: http://ejes.uaic.ro/articles/EJES2019_1002_GAN.pdf
• ISSN: 2068-651X; 2068-6633

The paper squarely concentrates on an examination of the relationship between a country’s business regulatory environment and the inward stock of foreign direct investment (FDI) in fifteen selected countries of Central Eastern and Southeast Europe by using a Mean Group (MG) estimator. The paper found no evidence that a country’s business regulatory environment is a statistically significant predictor of FDI neither in Central Eastern European nor in Southeast European countries. However, the study’s findings recommend that a further increase in FDI in both regions can be achieved by further economic growth, political stability, European Union integration and reduction costs of business regulations.