摘要：The main purpose of this paper is to investigate
relationship between foreign direct investment and economic growth based on 14 European
Transition Economies for the period 1995 to
2014. Empirical model includes GDP
per capita growth (% annual), foreign direct investment, net inflows
(% GDP) and composit
e index
which
is
developed with PCA
to see the effect of
determinants of
FDI on GDP as an independent variable
. Firstly
homogeneity and cross sectional dependence among units are examined with Delta and
퐶퐷
퐿푀
tests and it is found that all series have h
eterogeneity
and cross sectional dependency. For that reason, second generation Multifactor error structure (Pesaran et al, 2013) panel un
it root test is used and
it
is also taken into account e
ffect of unobserved common factors as a prerequisite of CCE Mo
del just after proving the co
-
integration relationship and
causality between variables via of Durbin
-
Hausmann (Westerlund, 2008
) co
-
integration and Dumetriscu
-
Hurlin (2012) causality tests. Obtained results
strongly support one
-
way causality from foreign d
irect investments and composite index to economic growth. Unfortunately, there is no causality
between foreign direct investments and comp
osite index. The
findings indicate that foreign direct investments contribute negatively to economic growth
in contras
t
to theory points out but determinants of FDI
contribute positively a
t European transition countries.
The results show that in Albania, Latvia,
Romania and Slovenia foreign direct investments and composite index have positive contributions to economic gro
wth in contrast to Bulgaria, Bosnia
and Herzegovina, Macedonia, Slovak Republic. Some countries have special and opposite situation. For example; in Croatia, Cze
ch Republic, Hungary,
Estonia and Lithuania FDI has negative coefficients but composite index h
as positive coefficients. Poland is the only exception for composite index has
negative but FDI has positive contribution to the economic growth.
