Structural Models Based on Associating The Foreign Direct Investment (Fdi) Inflows and Outflows, in Some of The Ex-Socialist, Central and Eastern European Countries (Ceec -10)

Abstract

The introduction to the paper starts from the natural hypothesis of uncompensated or partially compensated flows concerning the FDI flows in some of the ex-socialist, Central and Eastern European (CEEC-10) EU countries. In the first section, from the analysis of the association of FDI outputs and inflows, quantified percent of GDP, one naturally comes to is need to forecast output volumes in relation to FDI inflows. Within the paper’s methodology, a World Bank database for the CEEC-10 area (200 records) is being used, with the EViews software package, building a correlation matrix between a set of nine significant structural indicators selected. From the analysis of the correlation ratio values, other factors can also be extracted, which are useful in modeling FDI outflows, as a percentage structure of GDP, for the CEEC-10 group: trade balance, expressed as a percentage of GDP, and unemployment, expressed as a percentage of the totallabour force. The main results of the article concern the econometric modeling of outputs relative to FDI inflows, based on trade balance (all three of which are structurally expressed as percentages of GDP), and unemployment, expressed as a percentage of the total labour force, as well as the possible developmental hierarchies of the CEEC-10 economies in relation to the FDI life cycle and the need to compensate for the negative FDI inflows/outflows value. Some final remarks highlight the heterogeneity of FDI inflows and outflows within the CEEC-10 group, as well as the potential of using structural models.

Keywords

• foreign direct investment (fdi)
• central and eastern european countries eu member
• gross domestic product
• descriptive stats
• correlation matrix
• econometrical models