FDI determinants and its motives in Central and Eastern European Countries

Abstract: The paper analyses FDI determinants in 10 Central and Eastern European Countries. It is argued that the selected countries should predominantly experience positive effects of FDI because of their specific characteristics. With panel regression analysis it aims to explain the differences of FDI inflow levels to the countries. The significant determinants found are private sector, openness (share of trade in GDP), R&D expenditures and infrastructure. An extensive discussion is also lead on GDP and labour costs. Furthermore, the paper attempts to sort the determinants of market-seeking and resource-seeking and finds that the significant determinants represent both groups.