Foreign Capital Flows as Factors of Economic Growth in Bulgaria, Czech Republic, Hungary and Poland
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Дата
2019
Науковий керівник
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Анотація
While foreign investment is generally associated with economic growth, it can also pose significant risks to the
economies of the recipient countries. An empirical study is carried out to test the causality between various forms of
capital inflows and economic growth of four emerging market countries of Central and Eastern Europe: Bulgaria, the
Czech Republic, Hungary and Poland. Using the vector autoregression framework it is found that prior to the crisis
events in the world economy and euro area capital inflows, especially foreign direct investment, played significant role
in boosting economic growth. However, afterwards there is no evidence of such impact and the reverse trend is
observed: now economic growth is the factor driving capital inflows, again, mainly direct investments, to the countries.
Also, as a result of the steady increase in value of the accumulated assets possessed by foreign investors in national
economies negative effects of attracting foreign capital could be observed, which take the form of high volumes of
repatriated profits, exceeding received investment and posing new threats for national economies.
Опис
Ключові слова
capital flows, economic growth, balance of payments, emerging markets, vector autoregression (VAR)
Бібліографічний опис
Research in World Economy