Open AccessEU-COUNTRY AND NON-EU-COUNTRY AT THE TIME OF CRISIS: FOREIGN DIRECT INVESTMENT
Author(s) -
Helga Kristjánsdóttir,
Stefanía Óskarsdóttir
Publication year - 2020
Publication title -
baltic journal of economic studies
Language(s) - English
Resource type - Journals
eISSN - 2256-0963
pISSN - 2256-0742
DOI - 10.30525/2256-0742/2020-6-3-19-23
Subject(s) - foreign direct investment , foreign portfolio investment , financial crisis , international economics , stock market , portfolio investment , economics , portfolio , business , open ended investment company , economic policy , monetary economics , finance , return on investment , macroeconomics , production (economics) , paleontology , horse , biology
The global financial crisis affected the flows of foreign direct investment (FDI). This study focuses on two countries in the midst of the financial crisis: Iceland with IMF backup, and Ireland with ECB backup. The research focus is on the situation from the broad perspective of international economics and political atmosphere, combining government decisions with economic consequences. We analyze inward foreign direct investment, incorporating factors like economic size and stock market firms, receiving portfolio investment, rather than FDI. Our findings indicate that before the crisis the economic wealth in the domestic market to have positive effects on FDI, and firms receiving portfolio investment on the stock market are competing with FDI. This is the case for both Ireland and Iceland. However, after the crisis, these factors have insignificant impact on FDI.