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THE ALLOCATION OF OECD DIRECT INVESTMENT BETWEEN CEECS: A DISCRETE CHOICE APPROACH
Author(s) -
Rasciute Simona,
Puckett Sean,
Pentecost Eric J.
Publication year - 2015
Publication title -
bulletin of economic research
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 0.227
H-Index - 29
eISSN - 1467-8586
pISSN - 0307-3378
DOI - 10.1111/boer.12032
Subject(s) - foreign direct investment , profitability index , nested logit , economics , investment (military) , logit , capital (architecture) , discrete choice , econometrics , international economics , macroeconomics , finance , geography , archaeology , politics , political science , law
The choice of the location of foreign direct investment is a complex phenomenon, depending not only on host‐country characteristics, but also on host‐industry and specific source‐firm characteristics. To capture these different influences for foreign investment location decisions into 13 Central and Eastern European Countries (CEECs) over a twelve‐year period, this paper uses a Generalized Nested Logit (GNL) model with firm, industry, and country data. The novel empirical results show that the responsiveness of firms’ decisions regarding where to locate capital in CEECs to country‐level variables differs both across sectors and across firms of different sizes and profitability.