Privatisations, FDI, and Greece’s regional economic recovery: an empirical study of perceptual view of investors

Abstract

ABSTRACT This paper aims to explore the perceptions of domestic and foreign entrepreneurs (businesspeople and/or managers) operating in Greece towards the spatial diffusion of FDI effects caused by the privatization programme implemented by the Greek government after an economic crisis. In particular, it investigates whether attracting foreign direct investors through the ongoing privatization programme could be a policy tool for the country's recovery from the prolonged 2008 global economic crisis. To that end, it presents the results of a multinomial logistic regression model based on survey data from a significant sample of domestic and foreign investors in Greece. The key finding of this study suggests that the positive effects of FDI on the recovery of Greece from the economic crisis are more likely to benefit the country's economy as a whole than only the local economy in which the FDI is located. This finding is stronger for entrepreneurs who are (moderately) optimistic about the role of the privatization programme in attracting the interest of foreign investors than others. Overall, there is evidence that FDI attraction policies can help all Greek regions to recover from an economic crisis.