THE INFLUENCE OF FOREIGN DIRECT INVESTMENT ON SELECTED ECONOMIES IN CENTRAL EUROPE
Jaroslav Škrabal
Department of Economics and Public Administration, School of Business Administration in Karviná, Silesian
University in Opava, Univerzitní náměstí 1934/3, 733 40, Karviná, Czech Republic
DOI: https://doi.org/10.31410/Balkans.JETSS.2020.3.2.122-130
Jaroslav Škrabal
Department of Economics and Public Administration, School of Business Administration in Karviná, Silesian
University in Opava, Univerzitní náměstí 1934/3, 733 40, Karviná, Czech Republic
DOI: https://doi.org/10.31410/Balkans.JETSS.2020.3.2.122-130
Balkans Journal of Emerging Trends in Social Sciences, (2020) , Vol 3, No 2
ISSN: 2620-164X
ISSN: 2620-164X
Abstract: Nowadays, the decline in agricultural land is more evident than in the previous decades, and land is becoming a valuable natural resource. Agricultural land often gives way to construction activities, leading to the degradation of land resources almost all over the world. Foreign direct investment also affects the decline in agricultural land. The aim of this paper is to determine the influence of foreign direct investment (FDI) on the situation in individual economies in Central Europe (the Czech Republic, Slovakia, Germany, Austria, Poland and Hungary). In general, foreign direct investment reflects the intention of a resident of one economy (the direct investor) to acquire a permanent interest in an entity resident in an economy other than that of the investor. The paper focuses on FDI values and numbers on Greenfields in given economies and consequently how FDI significantly influence macroeconomic indicators such as GDP and unemployment in selected economies. The analyzed period is from 2003 to 2018. Data are obtained through the Eurostat, OECD, The World Bank and UNCTAD. In the period of recession (2009-2010), the FDI and GDP values in the economies are expected to be on a downward trend compared to unemployment, which will be higher than in previous years.
Keywords: FDI, GDP, Unemployment, Greenfields, Agricultural Land.
JEL Classifications E22 · E24
REFERENCES
Amoroso, S., & Müller, B. (2017). The short-run effects of knowledge intensive greenfield FDI on
new domestic entry. The Journal of Technology Transfer, 43, 815-836. https://doi.org/10.1007/
s10961-017-9575-y.
Ashraf, A., Herzer, D., & Nunnenkamp, P. (2016). The effects of greenfield FDI and cross-border
M&As on total factor productivity. The World Economy, 39(11), 1728–1755.
https://doi.org/10.1111/twec.12321.
Ayyagari, M., & Kosová, R. (2010). Does FDI facilitate domestic entry? Evidence from the Czech
Republic. Review of International Economics, 18(1), 14–29. https://doi.org/10.1111/j.1467-
9396.2009.00854.x.
Danakol, S. H., Estrin, S., Reynolds, P. D., & Weitzel, U. (2017). Foreign direct investment and
domestic entrepreneurship: Blessing or curse? Small Business Economics, 48(3), 599–612.
https://doi.org/10.1007/s11187-016-9792-z.
De Backer, K., & Sleuwaegen, L. (2003). Does foreign direct investment crowd out domestic entrepreneurship?
Review of Industrial Organization, 22(1), 67–84.
https://doi.org/10.1023/A:1022180317898.
Demakas, G, D., Horváth, B., Ribakova, E., & Wu, Y. (2007). Foreign direct investment in European
transition economies—The role of policies. Journal of Comparative Economics, 35(2),
269-386. https://doi.org/10.1016/j.jce.2007.03.005.
Dunning, H. J., (1977). Trade, Location of Economic Activity and the MNE: A Search for an
Eclectic Approach. The International Allocation of Economic Activity, 395-418. https://doi.
org/10.1007/978-1-349-03196-2_38.
Eurostat (2020). FDI flows intensity [online]. [cit.2020-03-25]. Available at: https://ec.europa.eu/
eurostat/databrowser/view/tec00107/default/table?lang=en.
Eurostat (2020). HICP - inflation rate [online]. [cit.2020-03-24]. Available at: https://ec.europa.eu/
eurostat/databrowser/view/tec00118/default/table?lang=en.
Eurostat (2020). Real GDP growth rate - volume [online]. [cit.2020-03-22]. Available at: https://
ec.europa.eu/eurostat/databrowser/view/tec00115/default/table?lang=en.
Eurostat (2020). Total unemployment rate [online]. [cit.2020-03-20]. Available at: https://ec.europa.
eu/eurostat/databrowser/view/tps00203/default/table?lang=en.
Hunady, J., & Orviska, M. (2014). Determinants of Foreign Direct Investment in EU Countries –
Do Corporate Taxes Really Matter? Procedia Economics and Finance, 12, 243-250. https://
doi.org/10.1016/S2212-5671(14)00341-4.
Johnson, A. (2006). The Effects of FDI Inflows on Host Country Economic Growth. Working Paper
Series in Economics and Institutions of Innovation, 58. Royal Institute of Technology,
CESIS - Centre of Excellence for Science and Innovation Studies. https://static.sys.kth.se/
itm/wp/cesis/cesiswp58.pdf
Majerová, I. (2019). Konkurenceschopnost vybraných ekonommik Střední Evropy. Ostrava: Sokrates.
Markusen, J. R., & Venables, A. J. (1999). Foreign direct investment as a catalyst for industrial
development. European Economic Review, 43(2), 335–356. https://doi.org/10.1016/S0014-
2921(98)00048-8.
Munemo, J. (2014). Business start-up regulations and the complementarity between foreign and
domestic investment. Review of World Economics, 150(4), 745–761. https://doi.org/10.1007/
s10290-014-0189-2.
Navaretti, B. G., & Vnebles, J. A. (2004). Multinational firms in the world economy. Princeton
Univ. Press, Princeton and Oxford. ISBN 978-0-691-12803-0.
Norbäck, P. J., & Persson, L. (2005). Privatization policy in an international oligopoly. Economica,
72(288), 635–653. https://doi.org/10.1111/j.1468-0335.2005.00436.x.
Samuelson, P. A., & Nordhaus, D. W. (2013). Ekonomie. 19. vyd. Praha: NS Svoboda. ISBN 978-
80-205-0629-0.
Šimonová, J. (2011). Investiční pobídky, nadnárodní firmy a regionální rozvoj. Liberec: Technická
univerzita v Liberci. ISBN 978-80-7372-803-8.
OECD (2020). FDI inflows [online]. [cit.2020-03-19]. Available at: https://data.oecd.org/fdi/fdiflows.
htm#indicator-chart.
The World Bank (2020). Area of agricultural land [online]. [cit.2020-03-23]. Available at:
https://data.worldbank.org/indicator/AG.LND.AGRI.K2?end=2016&start=1993.
UNCTAD (2020). Number of Announced greenfield FDI projects, by destination, 200š-2018. [online].
[cit.2020-03-12]. Available at: https://unctad.org/en/Pages/DIAE/World%20Investment%20
Report/Annex-Tables.aspx.
Keywords: FDI, GDP, Unemployment, Greenfields, Agricultural Land.
JEL Classifications E22 · E24
REFERENCES
Amoroso, S., & Müller, B. (2017). The short-run effects of knowledge intensive greenfield FDI on
new domestic entry. The Journal of Technology Transfer, 43, 815-836. https://doi.org/10.1007/
s10961-017-9575-y.
Ashraf, A., Herzer, D., & Nunnenkamp, P. (2016). The effects of greenfield FDI and cross-border
M&As on total factor productivity. The World Economy, 39(11), 1728–1755.
https://doi.org/10.1111/twec.12321.
Ayyagari, M., & Kosová, R. (2010). Does FDI facilitate domestic entry? Evidence from the Czech
Republic. Review of International Economics, 18(1), 14–29. https://doi.org/10.1111/j.1467-
9396.2009.00854.x.
Danakol, S. H., Estrin, S., Reynolds, P. D., & Weitzel, U. (2017). Foreign direct investment and
domestic entrepreneurship: Blessing or curse? Small Business Economics, 48(3), 599–612.
https://doi.org/10.1007/s11187-016-9792-z.
De Backer, K., & Sleuwaegen, L. (2003). Does foreign direct investment crowd out domestic entrepreneurship?
Review of Industrial Organization, 22(1), 67–84.
https://doi.org/10.1023/A:1022180317898.
Demakas, G, D., Horváth, B., Ribakova, E., & Wu, Y. (2007). Foreign direct investment in European
transition economies—The role of policies. Journal of Comparative Economics, 35(2),
269-386. https://doi.org/10.1016/j.jce.2007.03.005.
Dunning, H. J., (1977). Trade, Location of Economic Activity and the MNE: A Search for an
Eclectic Approach. The International Allocation of Economic Activity, 395-418. https://doi.
org/10.1007/978-1-349-03196-2_38.
Eurostat (2020). FDI flows intensity [online]. [cit.2020-03-25]. Available at: https://ec.europa.eu/
eurostat/databrowser/view/tec00107/default/table?lang=en.
Eurostat (2020). HICP - inflation rate [online]. [cit.2020-03-24]. Available at: https://ec.europa.eu/
eurostat/databrowser/view/tec00118/default/table?lang=en.
Eurostat (2020). Real GDP growth rate - volume [online]. [cit.2020-03-22]. Available at: https://
ec.europa.eu/eurostat/databrowser/view/tec00115/default/table?lang=en.
Eurostat (2020). Total unemployment rate [online]. [cit.2020-03-20]. Available at: https://ec.europa.
eu/eurostat/databrowser/view/tps00203/default/table?lang=en.
Hunady, J., & Orviska, M. (2014). Determinants of Foreign Direct Investment in EU Countries –
Do Corporate Taxes Really Matter? Procedia Economics and Finance, 12, 243-250. https://
doi.org/10.1016/S2212-5671(14)00341-4.
Johnson, A. (2006). The Effects of FDI Inflows on Host Country Economic Growth. Working Paper
Series in Economics and Institutions of Innovation, 58. Royal Institute of Technology,
CESIS - Centre of Excellence for Science and Innovation Studies. https://static.sys.kth.se/
itm/wp/cesis/cesiswp58.pdf
Majerová, I. (2019). Konkurenceschopnost vybraných ekonommik Střední Evropy. Ostrava: Sokrates.
Markusen, J. R., & Venables, A. J. (1999). Foreign direct investment as a catalyst for industrial
development. European Economic Review, 43(2), 335–356. https://doi.org/10.1016/S0014-
2921(98)00048-8.
Munemo, J. (2014). Business start-up regulations and the complementarity between foreign and
domestic investment. Review of World Economics, 150(4), 745–761. https://doi.org/10.1007/
s10290-014-0189-2.
Navaretti, B. G., & Vnebles, J. A. (2004). Multinational firms in the world economy. Princeton
Univ. Press, Princeton and Oxford. ISBN 978-0-691-12803-0.
Norbäck, P. J., & Persson, L. (2005). Privatization policy in an international oligopoly. Economica,
72(288), 635–653. https://doi.org/10.1111/j.1468-0335.2005.00436.x.
Samuelson, P. A., & Nordhaus, D. W. (2013). Ekonomie. 19. vyd. Praha: NS Svoboda. ISBN 978-
80-205-0629-0.
Šimonová, J. (2011). Investiční pobídky, nadnárodní firmy a regionální rozvoj. Liberec: Technická
univerzita v Liberci. ISBN 978-80-7372-803-8.
OECD (2020). FDI inflows [online]. [cit.2020-03-19]. Available at: https://data.oecd.org/fdi/fdiflows.
htm#indicator-chart.
The World Bank (2020). Area of agricultural land [online]. [cit.2020-03-23]. Available at:
https://data.worldbank.org/indicator/AG.LND.AGRI.K2?end=2016&start=1993.
UNCTAD (2020). Number of Announced greenfield FDI projects, by destination, 200š-2018. [online].
[cit.2020-03-12]. Available at: https://unctad.org/en/Pages/DIAE/World%20Investment%20
Report/Annex-Tables.aspx.
| balkans_jetss_vol_3_no_2_122-130.pdf |
Association of Economists and Managers of the Balkans
- UdEkoM Balkan -
179 Ustanicka St, 11000 Belgrade, Republic of Serbia
E-mail: [email protected]
www.udekom.org.rs
- UdEkoM Balkan -
179 Ustanicka St, 11000 Belgrade, Republic of Serbia
E-mail: [email protected]
www.udekom.org.rs
Tel. +381 62 812 5779
VAT number: 108747027
Registration number.: 28157347
Registration number.: 28157347