Foreign Direct Investments Determinants in the Transition Economies

The study focuses on the transition economies of South Eastern Europe, Central Europe and those of the ex-Soviet countries. The main research aims include the identification of the distinct FDI features, the research for FDI determinants and the relation between FDI and the host countries' institutions. The empirical analysis indicates that foreign investments in the area of interest were not particularly affected by the presence of corruption. Actually, foreign investors were rather encouraged by both high corruption and the low governance levels. Regarding FDI features, the formulated view is of foreign investments as business entities with secured financial support, export orientation, not significant contribution to labour skills and production increase and with a rather indifferent approach towards taxation. With regards to FDI determinants, the empirical results highlights the host country's market potential, the privatization opportunities , the existence of strategic natural resources, the quick implementation of the transition reforms in terms of competition policies, trade and prices liberalization and banking reforms, while also the existence of adequate infrastructure.