Please use this identifier to cite or link to this item: https://hdl.handle.net/10419/240646 
Year of Publication: 
2021
Series/Report no.: 
wiiw Working Paper No. 203
Publisher: 
The Vienna Institute for International Economic Studies (wiiw), Vienna
Abstract: 
This paper studies the role of business sentiment in the decisions of multinational enterprises (MNEs) to undertake foreign direct investment (FDI) across European Union (EU) member states. Based on the knowledge-capital model, the study employs the Pseudo Poisson Maximum Likelihood (PPML) estimator and panel data to examine empirically the determinants of FDI across EU member states during the period 2003-2017. The empirical evidence suggests that better economic sentiment in an EU Member State induces MNEs to undertake FDI in that country, while worse economic sentiment in an EU member state motivates an MNE in that country to invest abroad.
Subjects: 
economic sentiment
factor endowments
foreign direct investment
multinational enterprise
market size
EU Member States
JEL: 
F21
F23
Document Type: 
Working Paper

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