The objective (aim) of this paper is to explore the impact of the Ease of Doing Business Indicators on FDI on transition economies in Europe. Authors have used the dynamic panel methodology, by using three methods: Pooled Ordinary Least Square (POLS), Fixed Effect (FE), and Two Step-System Generalised Method of Moments (GMM) estimation techniques. By referring to the GMM technique, it can be seen that variables such as: Starting a Business, Registering property, Getting electricity and Resolving insolvency have a positive and significant impact in attracting FDI in 16 European transition countries, while variables as: Dealing with construction permits, Getting credit, Paying taxes, Protecting minority investors, have shown negative impact, whereas Trading Across Border and Enforcing contracts have not shown any impact on attracting FDIs in European transition countries. This paper contributes to the enrichment of existing literature in this field by using these three methods.
Azam, M., Khan, H., Hunjra, A. I., Ahmad, H. M., Chani, D., & Irfan, M. (2010). Institutional, Macro Economic Policy Factors and Foreign Direct Investment: South Asian Countries Case. African journal of business management, 5, 4306-4313.
Basit, A., & Hasan, Z. (2018). Impact of capital structure on firms performance: a study on Karachi stock exchange (KSE) listed firms in Pakistan. International Journal of Information, Business and Management, 10(4), 158-172.
Hassan, Z., & Basit, A. (2018). Ease of Doing Business and Its Impact on Inward FDI.
International Monetary Fund. (2019, October 1). Retrieved from www.imf.org.
Kasongo, K., B., 2013. Foreign Direct Investment in Sub-Saharan African Countries: Does the Business Regulation Matter? (Doctoral dissertation, Seoul National University, Seoul).
Mahuni, K., & Bonga, W. G. (2017). Nexus Between Doing Business Indicators and Foreign Direct Investment for Zimbabwe: A Time Series Analysis. Journal of Economics and Finance, 2(2), 1-8.
Olival, A. I. D. N. (2012). The influence of Doing Business’ institutional variables in Foreign Direct Investment (Doctoral dissertation).
Piwonski, K. (2010). Does the ‘Ease of Doing Business’ In a Country Influence its Foreign Direct Investment Inflows?
Sedmihradsky, M., & Klazar, S. (2002). Tax competition for FDI in Central-European countries.
Sethi, D., Guisinger, S. E., Phelan, S. E., & Berg, D. M. (2003). Trends in foreign direct investment flows: a theoretical and empirical analysis. Journal of international business studies, 34(4), 315-326, https://doi.org/10.1057/palgrave.jibs.8400034.
Shahadan, F., Sarmidi, T., & Faizi, F. J. (2014). Relationships between doing business indexes and FDI net inflows: empirical evidence from six Asian countries (Afghanistan, Bangladesh, India, Iran, Pakistan and Sri Lanka). Prosiding Persidangan Kebangsaan Ekonomi Malaysia ke-9.