Growth empirics with institutional measures is performed for 25 transition countries overthe period 1990-95. Estimation results suggest that (particularly state) institutions aresignificant for growth and, especially, foreign direct investment (FDI), the latter in turnbeing important for the...

This paper investigates the importance of institutions as a determinant of growth and foreign direct investment (FDI) in 25 transition countries for 1990-1998. It introduces some novel institutional measures, performs extensive sensitivity tests, and checks for reverse causation. Estimation...

Our main interest is the impact of the choice of the speed of economic reform on economic growth. We estimate a system of 3 equations where economic growth, economic reform and FDI are jointly determined. We find that new reforms affect economic growth negatively but attract FDI, whereas the...

This paper examines the importance of Foreign Direct Investment (FDI) on economic growth. Using a panel data set for 27 transition economies over the period 1991-2004 as well as the methodology of panel cointegration and causality tests, the empirical findings show that FDI does exhibit a...

Gravity factors explain a large part of Foreign Direct Investment (FDI) inflows in transition economies, including in Southeastern Europe—a region not comprehensively covered before in econometric studies—but host country policies also matter. Key are policies that affect unit labor costs,...

This paper investigates the importance of factor endowment vis-à-vis institutions in explaining the locational choice of foreign investors during the 1990s. Using dynamic panel estimation on data for transition economies, we find that low labour costs, bureaucratic efficiency ("institutions"),...

Although the theoretical literature has identified various sizeable benefits from foreign direct investment inflows (FDI), the empirical literature has been unable to establish a positive and significant impact of FDI on the rates of economic growth of host countries. One reason for this...

This paper examines the importance of agglomeration economies and institutions vis-a-vis initial conditions and factor endowments in explaining the locational choice of foreign investors. Using a unique panel data set for 25 transition economies between 1990 and 1998, we find that the main...

FDI has played a strong role in the export-led growth of eastern European countries that are now members of the European Union (EU). Largely sourced from advanced Europe, FDI inflows were motivated by the intention to pursue new markets and cost efficiency. Over time, foreign investment has...