Influence and Estimation of Geopolitical Risk on FDI in Eastern European Economies

Abstract

In the current complex international situation, especially underthe influence of the Russian-Ukrainian conflict, the inflow of FDI in Eastern European countries is seriously affected by geopoliticalrisks. However, there is a lack of research on this subject in Eastern Europe. Based on FDI inflow data in Eastern European countries and the political risk ratings of the ICRG from 2009 to 2020, this paper investigates the effect of geopolitical risks on FDI inflow to Eastern Europe using simple linear regression. It has been found that geopolitical risks have a significant negative impact on FDI inflows in Eastern European countries. However, further studies have found that signing RTAs can help alleviate this negative effect; actively carrying out bilateral trade or investment agreements is conducive to the development of FDI in host countries

Keywords

• geopolitical risks
• fdi
• eastern europe