Towards sustainable economic development: estimation of institutions’ role in FDI attraction

Abstract

In recent years Foreign Direct Investment (FDI) has attained significant importance as instr ument for accelerating growth and development of countries. The role played by FDI in economic growth of various economies drew the attention of researchers and policy makers to explore the FDI led growth linkage and identify the push and pull factors of F DI destinations. Scientists try to find out which of factor plays a key role in attracting FDI. In presented paper authors raise and verify hypothesis about the importance of the institutions as the factor attracting FDI. Design/methodology/ approach – For analyses eleven countries from different Europe regions, but similar in sizes or historical past has been chosen: Austria, Belgium, Bulgaria, Estonia, Hungary, Latvia, Lithuania, Netherlands, Romania, Slovakia and Slovenia. These countries reflect three different regions of the Europe according to the proportionately similar investment figures. These regions are West Europe countries, Baltic countries and Central Eastern Europe countries. Due to availability of data period between 1995 and 2010 has been chosen. The empirical analysis is based on a regression model. [...].