Effect of Host Country Determinants and Institutional Quality on Outward Foreign Direct Investment from Central, Eastern and South-Eastern Europe

Over the past three decades, the countries of the Central, Eastern and South-Eastern Europe (CESEE) have achieved significant growth in terms of the volume of outward foreign direct investments (OFDI). Nonetheless, the effect of the host country location determinants and institutional quality on OFD...

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Bibliographic Details
Published in:Journal of the knowledge economy 2024-09, Vol.15 (3), p.13272-13308
Main Authors: Kurtović, Safet, Maxhuni, Nehat, Halili, Blerim, Maxhuni, Arta
Format: Article
Language:English
Subjects:
Artificial intelligence
Competitive intelligence
Corporate governance
Economic Policy
Economics
Economics and Finance
Entrepreneurship
Financial literacy
Gender pay gap
Host country
Knowledge economy
R & D/Technology Policy
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Summary:Over the past three decades, the countries of the Central, Eastern and South-Eastern Europe (CESEE) have achieved significant growth in terms of the volume of outward foreign direct investments (OFDI). Nonetheless, the effect of the host country location determinants and institutional quality on OFDI has not been examined sufficiently for these countries. The main objective of this study is to estimate the effect of the host country location determinants and institutional quality on OFDI from CESEE countries. This study is based on Dunning’s OLI paradigm and it has been expanded by addition of institutional theory. The empirical estimate is based on a sample of eight CESEE countries and a panel analysis for the period 2001–2021. The results of the estimate show that most of the location determinants (gross domestic product, technological assets and research and development) and all institutional determinants (government effectiveness, political stability and absence of violence/terrorism, control of corruption, regulatory quality, economic freedom, labour freedom, trade freedom and investment freedom) of the host country (in Europe, not the world) have a significant effect on OFDI from CESEE countries. It was also found that OFDI flows from these countries had mostly been motivated by efficiency-seeking and strategic asset-seeking.
ISSN:1868-7873
1868-7865
1868-7873
DOI:10.1007/s13132-023-01622-0