Determinants of foreign direct investment inflows: A case of the Visegrad countries

Abstract

This study identifies the determinants of foreign direct investment inflows into Visegrad countries using the country level data from the year 1989 to the year 2016. Based on correlation and regression analyses (OLS and fixed-effect model), we have identified the level of gross wages and the share of educated labour force as the most significant determinants with positive effect on FDI inflows. On the other hand, corporate income tax rate, trade openness and expenditures on research and development have been detected as the determinants with negative impact on FDI. Our study has not brought any evidence on inflation rate, unemployment rate, GDP per capita and the innovation output, as the sum of patents and trademarks, influencing FDI inflows in the case of Visegrad countries.