Eu Enlargement To Central And Eastern European Countries Fdi Inflow Of Factor Analysis

Since transition, the Central and Eastern Europe, such as Czech Republic, Poland and Hungary, has attracted a lot of foreign direct investment, which is crucial to the economy recovery. After that, the EU enlargement boost the FDI inflow again. However, different from the theory, some empirical analysis indicates that the key European Union annoucements have little influnce on the CEECs' FDI inflow, and that there is no evidence of FDI redirection from CEECs to the countries of Southern Europe.The literature is concentrated on analyzing the effect of those key European Union annoucements before 2003 on the CEECs' FDI inflow, whereas there is little literature analyzing the effect of the actual accession in 2004. Besides, the period covered is relatively limited, before 2003. Thus, using gravity model, this paper analyzes the effect of the actual accession in 2004 on FDI inflow of Czech Republic, Poland, Bulgaria, Estonia, Slovak and Latvia, between 1997 and 2006.This paper is organized as followed: the first part introduces the background, the method, its potential contribution and shortage. Chapter One summarizes the standard FDI theory and the latest development, especially those on the determination of CEECs' FDI inflow. Chapter Two gives a glimpse of the CEECs' FDI inflow lately, and distinguishes the differences before and after the EU accession. Chapter Three is the key section, in which, the determinant model is firstly deduced, and then the key annoucement in 2002 and the actual accession in 2004 are introduced to find out their effect on the CEECs' FDI inflow. The last section makes the conclusion and provides possible research area in the future.