This paper analyzes policies to attract Foreign Direct Investment (FDI) based on a sample comprising the US plus six EU countries (US-plus-EU-6) and four Central and Eastern European Countries (CEEC-4). The analysis draws on industry-level data for 1995-2003. A Dynamic Panel Data approach is...

In line with previous literature this paper finds that strict employment protection legislation has a negative impact on the volume of inward Foreign Direct Investment. Rigid labor markets result in high adjustment and exit costs which deter foreign investments. We also find that the deterrent...