Acta Univ. Agric. Silvic. Mendelianae Brun. 2016, 64(5), 1749-1761 | DOI: 10.11118/actaun201664051749

Determinants of Foreign Direct Investments in Transition Economies: Case of Commonwealth of Independent Countries

Sobir Shukurov1, Mansoor Maitah2, Lubo¹ Smutka3
1 Department of Foundations of Economics and Governance, Tashkent State University of Law, Uzbekistan
2 Department of Economics, Faculty of Economics and Management, Czech University of Life Sciences Prague, Czech Republic
3 Faculty of Economics and Management, Czech University of Life Sciences Prague, Kamıcká 129, 16 521 Prague 6, Czech Republic

While there has been voluminous research on the determinants of FDI for developed and developing countries, little has been done on this issue for transition economies, especially, for the Commonwealth of Independent States (CIS) countries. the present paper examines the determinants of inward Foreign Direct Investment (FDI) flows in the CIS during 1995-2010. the results of empirical analysis using panel data models, conducted with the purpose of identifying the factors that determine the motivation and decision of multinational companies (MNC) to invest in CIS economies, show that regardless of the presence of high investment risk in transition economies, the choice of FDI location always depends on a preliminary analysis of countries' advantages (FDI stock, market size, abundance in natural resources) and disadvantages at macro level (fiscal imbalance and inflation). These pre-existing conditions can always roughly predict the type of FDI (resource-seeking, market-seeking, efficiency-seeking).

Keywords: commonwealth of independents countries, multinational companies, determinants of FDI, panel data models
Grants and funding:

This paper was supported by Grant Agency of the Faculty of Economics and Management, Czech University of Life Sciences Prague: Is there any possibility for functional co-operation of the post-soviet countries? [nr. 20161014].

Prepublished online: October 31, 2016; Published: November 1, 2016  Show citation

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Shukurov, S., Maitah, M., & Smutka, L. (2016). Determinants of Foreign Direct Investments in Transition Economies: Case of Commonwealth of Independent Countries. Acta Universitatis Agriculturae et Silviculturae Mendelianae Brunensis, 64(5), 1749-1761. doi: 10.11118/actaun201664051749
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