LINKAGES BETWEEN ECONOMIC GROWTH AND FDI IN CEE COUNTRIES

This paper examines linkages among foreign direct investment (FDI) and economic growth in 11 countries from Central and Eastern Europe (CEE) for the period of 1997 – 2014. Findings from panel data analysis suggest that the relative size of economic growth indicators affect FDI of CEE countries. This result holds for both contemporaneous and lagged relationships. FDI has an impact on economic growth, and this effect is strengthened by financial market development. The efforts of CEE countries increase the economic growth and beneficial spill over effects from FDI to local economies should be concentrated on the support of the development of local financial markets.