Open AccessWhat Drives Cross-Border Mergers and Acquisitions and Greenfield Foreign Direct Investment Capital Flows? Reconsideration in the Case of the Selected Former Yugoslav Countries
Author(s) -
Ksenija Denčić-Mihajlov,
Vinko Lepojević,
Jovana Stojanović
Publication year - 2021
Publication title -
inžinerinė ekonomika
Language(s) - English
Resource type - Journals
eISSN - 2029-5839
pISSN - 1392-2785
DOI - 10.5755/j01.ee.32.3.27440
Subject(s) - foreign direct investment , greenfield project , hausman test , economics , international economics , mergers and acquisitions , capital (architecture) , panel data , business , monetary economics , international trade , fixed effects model , macroeconomics , finance , history , archaeology , econometrics
Bearing in mind the different nature and the impact of various types of foreign direct investments (FDI) on the one hand, and the specific macroeconomic environment in the post-socialist countries on the other hand, in this paper we reexamine the selected macroeconomic factors that affect the two types of FDI inflows (cross-border mergers and acquisitions and greenfield FDI) in four countries of the former Socialist Federal Republic of Yugoslavia. The study employs the balanced panel data framework and covers twelve-year period (2006-2017). Having performed the Hausman test, we use the random effect model and provide evidence that: (1) the key FDI macroeconomic determinants in stable business conditions, examined in numerous research studies, can have a different impact on FDI in times characterized by unstability and financial crisis, (2) some determinants of FDI inflows have different importance and direction in the case of cross-border M&A and greenfield FDI. Our findings are relevant for policymakers who should reconsider the key factors that fuel the FDI inflows towards their developing economies.