Abstract
The objective (aim) of this paper is to explore the impact of the Ease of Doing Business Indicators on FDI on transition economies in Europe. Authors have used the dynamic panel methodology, by using three methods: Pooled Ordinary Least Square (POLS), Fixed Effect (FE), and Two Step-System Generalised Method of Moments (GMM) estimation techniques. By referring to the GMM technique, it can be seen that variables such as: Starting a Business, Registering property, Getting electricity and Resolving insolvency have a positive and significant impact in attracting FDI in 16 European transition countries, while variables as: Dealing with construction permits, Getting credit, Paying taxes, Protecting minority investors, have shown negative impact, whereas Trading Across Border and Enforcing contracts have not shown any impact on attracting FDIs in European transition countries. This paper contributes to the enrichment of existing literature in this field by using these three methods.
Highlights
Nowadays there is a continuing debate among various authors regarding the impact of the indicators of Doing Business in attracting Foreign Direct Investment (FDI) flows
The aim of this paper is to explore the impact of the Ease of Doing Business Indicators on FDI in transition economies in Europe
Referring to the Generalised Method of Moments (GMM) technique, it can be seen that variables such as: Starting a Business (SB), Registering Property (RP), Getting Electricity (GE), and Resolving Insolvency (RI) have a positive and significant impact in attracting FDI in 16 European transition countries, while the variables of Dealing with Construction Permits (DCP), Getting Credit (GC), Paying Taxes (PT), and Protecting Minority Investors (PMI) have shown negative impact in attracting FDI in these countries, whereas the variables of Trading Across Border (TAB) and Enforcing Contracts (EC) have not shown any impact on attracting FDIs in European transition countries
Summary
Nowadays there is a continuing debate among various authors regarding the impact of the indicators of Doing Business in attracting Foreign Direct Investment (FDI) flows. Since transition countries have fewer financial resources to develop their own countries, they need greater attention in attracting FDI flows in their countries. Due to the great importance of Foreign Direct Investment (FDI) for the countries in transition, the latter are taking steps to improve the business environment in these countries, since the decision of the foreign investors might depend on various dimensions of business environment. These facilities are made in order to simplify the procedures during the investment process and reduce the costs for investors
Sign-in/Register to view highlights & summary Sign-in/Register to access full text options 
Free) 
Talk to us
Join us for a 30 min session where you can share your feedback and ask us any queries you have
Schedule a call
