THE ALLOCATION OF OECD DIRECT INVESTMENT BETWEEN CEECS: A DISCRETE CHOICE APPROACH |
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| Authors: | Simona Rasciute Sean Puckett Eric J Pentecost |
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| Institution: | 1. Department of Economics, School of Business and Economics, Loughborough University, Loughborough, UK;2. Volpe National Transportation Systems Center, Cambridge, Massachusetts, USA;3. Department of Economics, School of Business and Economics, Loughborough University, Loughborough, UK, and the Faculty of Applied Economics, University of Antwerp, Antwerp, Belgium |
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| Abstract: | The choice of the location of foreign direct investment is a complex phenomenon, depending not only on host‐country characteristics, but also on host‐industry and specific source‐firm characteristics. To capture these different influences for foreign investment location decisions into 13 Central and Eastern European Countries (CEECs) over a twelve‐year period, this paper uses a Generalized Nested Logit (GNL) model with firm, industry, and country data. The novel empirical results show that the responsiveness of firms’ decisions regarding where to locate capital in CEECs to country‐level variables differs both across sectors and across firms of different sizes and profitability. |
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| Keywords: | foreign direct investment generalized nested logit model heteroscedastic extreme value model multi‐level data C25 F23 |
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