This paper investigates determinants of foreign direct investment (FDI) in the real estate sector across 26 European Union member states. Using two-way fixed effects panel regression models, we test whether: (H1) rising construction producer prices negatively affect real estate FDI, with a weaker effect in eurozone countries; and (H2) higher property tax burdens negatively affect real estate FDI, with a weaker effect in post-transition member states. Both hypotheses are confirmed at conventional significance levels. Construction price inflation deters foreign real estate investment, but the eurozone's macroeconomic stability, shared currency, and harmonized business rules substantially attenuate this deterrent. Property taxes also reduce FDI inflows, though this effect is largely neutralized in post-transition economies, where lower baseline asset prices, stronger capital appreciation expectations, and targeted tax incentive policies compensate for the tax burden. These findings have direct implications for investment climate policy in both eurozone and post-transition EU economies.
This paper examines the impact of foreign direct investment (FDI) on long-term growth and macroeconomic stability in 24 resource-dependent emerging economies — current and former members of OPEC+ — over the period 1996–2023. Using fixed-effects and dynamic difference GMM estimators, alongside Dumitrescu–Hurlin panel Granger causality tests, the analysis documents three main findings. First, the growth effects of FDI materialize with a one-year lag rather than contemporaneously, reflecting the time required for capital absorption and technology diffusion. Second, the interaction between FDI and natural resource rents is positive and strengthens with the degree of resource dependence, indicating that resource abundance amplifies rather than constrains the productivity of foreign capital. Third, government effectiveness conditions both the growth and stability effects of FDI, while macroeconomic stability indicators (inflation, unemployment, current account balance) appear to attract FDI rather than be improved by it. The findings contribute to the conditional FDI–growth literature and offer policy-relevant insights for resource-rich emerging economies seeking to leverage foreign capital for sustainable diversification.
Abdullah R. Alotaibi· International Journal of Ene...· 0 citations
Foreign direct investment (FDI) represents a key driver of economic development in Central and Eastern European economies. This study examines the determinants of inward FDI, highlighting the crucial role of institutional quality in shaping the attractiveness of Central and Eastern European economies to foreign capital inflows. Using a balanced panel data from 11 Central and Eastern European economies over the period 2002–2023, the two-way fixed effects estimator provides evidence of the heterogenous effects of distinct dimensions of institutional quality on FDI inflows. The political accountability and regulatory quality constitute the two pivotal institutional dimensions that significantly drive FDI inflows in Central and Eastern European economies. The finding is robust to instrumental variable estimations and test for omitted variable bias, suggesting that the relationship is unlikely to be driven by endogeneity concerns. Moreover, robustness analyses using alternative measure of inward FDI, sample split analysis to accommodate phantom FDI, lag-augmented local projections, and panel-corrected standard errors estimator strongly support the positive effects of political accountability and regulatory quality on FDI inflows. The findings indicate that improvements in governance are not uniformly effective in attracting greater FDI inflows. Institutional reforms that enhance political accountability and regulatory quality instead play distinct but complementary roles in sustaining FDI inflows in Central and Eastern European economies.
Sichen Lin, Tien-Ming Yip· Future Business Journal· 0 citations
This paper examines the determinants of real house prices in 24 European Union countries using annual panel data for 2005–2024. The dynamic framework relates real house prices to GDP per capita in purchasing power standards, lagged inflation, employment as a share of total population, private-sector credit flows as a share of GDP, the logarithm of aggregate tourism receipts, annual changes in urban population, and property rights protection. A Fixed Effects specification serves as the benchmark. Tests reveal pervasive cross-unit interdependence, while Pesaran’s CIPS test indicates a mixed order of integration, with both I(0) and I(1) variables. These findings support second-generation panel estimators. The Dynamic Heterogeneous Panel Model is the main estimator, and the Augmented Mean Group estimator provides a robustness check. The baseline results show strong persistence in real house prices. GDP per capita, employment, private-sector credit flows, and annual changes in urban population have positive effects, whereas lagged inflation, tourism receipts, and property rights protection have negative effects. AMG estimates broadly confirm this pattern. However, annual changes in urban population remain positive but lose statistical significance under AMG, unlike in the baseline model, where the effect is positive and significant when country-specific trends and greater heterogeneity are allowed for. Overall, EU housing markets are shaped mainly by macroeconomic fundamentals and financial conditions. Their long-run sustainability also depends on financial stability, housing affordability, and institutional predictability, with institutional quality appearing to play a stabilizing role. Urban population changes matter, although their effect is weaker and less robust across specifications.
The increasing globalization of economic activity has intensified concerns regarding tax evasion and the use of transfer pricing strategies by multinational enterprises. This study aims to evaluate the relationship between tax evasion and transfer pricing within the framework of international transactions, with a particular focus on European Union member states. Given the difficulty of directly measuring these phenomena, the analysis employs proxy variables, using Foreign Direct Investment inflows as an indicator of multinational activity and potential profit shifting, and taxrelated and institutional indicators as explanatory factors. The empirical investigation is based on a panel dataset covering European Union countries over the period 2012-2024. The model incorporates Corporate Income Tax rates, Gross Domestic Product, the Corruption Perceptions Index, and the Index of Economic Freedom, alongside a dummy variable distinguishing between low-tax and high-tax jurisdictions. Based on these variables two model specifications are estimated in order to assess the robustness of the relationship between corporate taxation and Foreign Direct Investment inflows: a baseline model including a tax regime dummy variable and an extended model incorporating economic size, proxied by Gross Domestic Product. The results suggest that multinational enterprises do not base their decisions solely on statutory tax rates, but rather consider a broader set of factors, including market size, institutional environment, and economic conditions. From the perspective of transfer pricing, the results suggest that firms may rely on profit-shifting strategies to mitigate tax differentials, thereby weakening the direct link between tax rates and observable investment flows.
Roxana-Veronica Oprea· Development Through Research...· 0 citations
This research investigates how trade liberalisation can influence Nigeria’s economic growth through capital formation. To achieve this, a Structural Vector Autoregressive (SVAR) model is utilised to assess the relationship between trade liberalisation and economic growth using quarterly data from 1986Q1 - 2023Q4. Findings indicate that trade liberalisation affects capital formation
positively. The study further reveals a significant association between external trade sector liberalisation and economic
performance, facilitated by investment in physical assets in the economy. Also, the impulse response functions suggest a weak relationship among trade liberalisation, capital formation, and economic growth in the short term due to temporary external shocks. The variance decomposition reveals weak shocks between trade liberalisation and capital accumulation on real GDP in the short term. Based on the empirical evidence, the study recommends that the federal government should reduce trade barriers and prioritize investment in physical infrastructure; tax incentives, subsidies, and grants should be provided to the private sector; and financial institutions should be strengthened to boost the confidence of foreign and domestic investors. By reducing tariffs and other regulatory restrictions to trade, economies are expected to be better positioned to engender production, attract foreign investment, and also enhance capital accumulation of productive capital over time.
Kelvins Terhemba Adzer, David Terfa Akighir, Bridget Mumun Akaakohol· Lafia Journal of Economics a...· 0 citations
This study investigates the effects of financial market instability, national security, and foreign direct investment (FDI) on economic growth in Sub-Saharan Africa from 1991 to 2023, while examining the moderating role of institutional quality. The study employs a panel autoregressive distributed lag (ARDL) model as the baseline estimator, complemented by fully modified ordinary least squares (FMOLS) and dynamic ordinary least squares (DOLS) for robustness analysis. The results reveal that financial market instability constrains economic growth primarily through sovereign bond market instability and vulnerability to earnings manipulation, whereas stock price volatility exerts no significant long run effect. Improved peace conditions and domestic military expenditure promote growth, while terrorism undermines economic performance. Government effectiveness and control of corruption enhance growth, whereas foreign direct investment exerts a negative long-run effect in the absence of supportive domestic conditions. The interaction results show that institutional quality significantly conditions the effects of financial market conditions, national security, and foreign investment on growth. Stronger institutions reduce the adverse consequences of financial and security-related disturbances and improve the growth-enhancing capacity of foreign capital. The FMOLS and DOLS estimates largely confirm the baseline results. The study concludes that institutional quality constitutes a critical transmission mechanism through which financial stability, national security, and foreign investment influence long run economic growth in Sub-Saharan Africa.
Charles O. Manasseh, C. Logan, Emmanuel Eleje et al.· Journal of Risk and Financia...· 0 citations
