Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/75444
Authors: 
Altomonte, Carlo
Year of Publication: 
1998
Series/Report no.: 
LICOS Discussion Paper 76
Abstract: 
Building on the empirical evidence resulting from a newly developed database of foreign direct investment (FDI) operations in the countries of Central and Eastern Europe (CEECs), panel data techniques are used to show that, at the sector level, a consistent modelling of FDI flows needs to take into account not only the determinants traditionally considered by the literature, including the recent developments on gravity models, but also variables linked to the institutional environment in which the FDI is undertaken. The inclusion of these variables, affecting the risk and the uncertainty of the FDI operation, is in line with the main findings of the real option theory of investments, whose implications are here empirically tested with success.
Subjects: 
panel data
real option theory
gravity models
FDI
transition economies
JEL: 
C23
D81
F15
F21
P20
Document Type: 
Working Paper

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