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" The determinants of foreign direct investment during transition from a centrally-planned to a market economy: "
Nestorova, Petya.
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Latin Dissertation
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| Record Number
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1093489
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TLets285760
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| Main Entry
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Nestorova, Petya.
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| Title & Author
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The determinants of foreign direct investment during transition from a centrally-planned to a market economy:\ Nestorova, Petya.
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| College
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University of Sussex
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| Date
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1999
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| student score
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1999
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| Degree
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Ph.D.
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| Abstract
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This thesis examines the factors which have influenced the inflow of foreign direct investment(FDI) to Bulgaria and Hungary since 1989, in the course of their transitions from centrallyplannedto market economies. It compares two countries that are similar in terms of their marketsize, industrial structure and openness of the economy (although different in other aspects). Inso doing, the thesis seeks explanations of the marked divergence in their FDI patterns. It arguesthat the timing and scope of inward FDI in Bulgaria and Hungary, and central and eastern Europemore generally, depend upon the progress of transition. More specifically, the pattern of FDIdepends upon the changes that transition introduces in the recipient countries' locationaladvantages. Moreover, the path and pace of transition are also influenced by the scale andcharacteristics ofFDI inflows.Dunning's eclectic paradigm of international production is used as the conceptual frameworkunderlying the work. The comparison between Bulgaria and Hungary is done both throughanalysing macro statistical data on their actual FDI patterns, and by means of a survey andinterviews with companies which have invested in the two countries. The survey researches aset of location-specific advantages, investors' strategic motivations, the investment process andthe impact of the investment on the host economy. The results of the survey and the interviewshighlight the importance of location-specific advantages moulded in the process of transition,in relation to the long-term strategies of foreign investors.The thesis argues that Hungary has attracted a much higher level ofFDI than Bulgaria becauseit has moved faster, and more effectively, towards an economic system based on a marketeconomy. This argument is supported through an analysis of the two countries' legislativeframeworks for FDI, their privatisation programmes and competition policies. The thesis alsodraws contrasts between their macro-economic and business environments, their politicalclimates, and the conditions influencing the formation of investors' perceptions. Thesecomparisons highlight shortcomings in the Bulgarian FDI environment relative to that ofHungary, in particular in the areas of privatisation, competition and general business conditions.
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Privatisation; Competition policy
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| Added Entry
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University of Sussex
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