Connections between FDI, Corruption Index and Country Risk Assessments in Central and Eastern Europe

Abstract

Abstract Foreign Direct Investments (FDI) represent one of the most important avenues for an economic system to improve itself and to increase the level of competitiveness within and among its constituent parts – various economic agents. FDI generate a variety of effects inside the host-economies (it affects economic growth, regional development, sustainable development, etc.), effects that differ from country to country, according to several criteria (economic, political, social, institutional). In the same time, the amount of FDI varies from country to country, in accordance to their “attractivity” in the eyes of the international business community. There are several factors that influence this perception; this paper will focus on two of them – the corruption perception index - CPI (data from Transparency International) and the country risk assessment - CRA (data from COFACE). In other words, the present article will analyze the relations between FDI volume, corruption perception index and country risk assessments for Central and Eastern Europe in an attempt to answer the question if these two factors influence, in any way, FDI in the region.