The tradition of gravity models is in the analysis of trade flows with market size and geographic or economic distance as core variables. Both these variables can be important determinants of FDI, too. However, when such models are used to explain FDI, there can be differences in the mode of...

This contribution discusses to what extent the expansion of German firms in Central East European (CEE) leads to FDI diversion from traditional host countries. Diversion is defined as reduction of FDI in absolute terms in traditional host regions as a consequence of expansion in CEE countries....

The tradition of gravity models is in the analysis of trade flows with market size and geographic or economic distance as core variables. Both these variables can be important determinants of FDI, too. However, when such models are used to explain FDI, there can be differences in the mode of...