Does FDI inflow contribute to Poverty Reduction? An empirical evidence from the EU transition countries

TitleDoes FDI inflow contribute to Poverty Reduction? An empirical evidence from the EU transition countries
Publication TypeJournal Article
Year of Publication2019
AuthorsGanić, M
JournalScientific Annals of Economics and Business
Volume66
Issue1
Start Page15
Pagination26
KeywordsForeign Direct Investment (FDI); Western Balkan; determinants of FDI; panel data analysis
Abstract

This paper seeks to empirically examine the validity of nexus between Foreign Direct Investment (FDI) and poverty reduction in the context of twelve European transition and post-transition countries divided in two regions, between 2000 and 2015. The empirical analysis investigates whether some variations in poverty reduction are influenced by countries’ FDI performance and lead by progress in the EU integration process. The study finds that the nexus between FDI and poverty reduction varies between two regions (the Western Balkan region and the Central Europe region). While the relationship between FDI and poverty reduction has a positive effect in the Western Balkan region, it is insignificant and negative in the Central European region. In addition, the findings confirm some earlier assumptions that FDI impacts poverty reduction more strongly in poorer countries (the Western Balkan region) than in wealthier countries (the Central European region).

DOI10.2478/saeb-2019-0003