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2021, vol. 16, iss. 1, pp. 21-37
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FDI determinants in Europe and Chinese influence
Determinante SDI u Evropi i uticaj Kine
Ključne reči: SDI; trgovinski troškovi; povezanost; kineske investicije; horizontalne; vertikalne i izvozno orijentisane strategije; "Belt and Road Initiative" (BRI); fiksni i slučajni efekti
Abstract
Despite recent concerns about the increasing influence of outside investors on the European Union (EU) and Western Balkans, the developed European countries are still a dominant source of foreign direct investment (FDI) in the region, confirming the benefits of EU membership. At the same time, fast-growing connectivity and lower trade costs in accession and neighboring countries determine the FDI growth from China, particularly via the Belt and Road Initiative (BRI). By applying panel data over 2000-2019 for 34 countries, which form 89% of all European FDI, we first examine FDI patterns around Europe, compare the EU, NMS, and Western Balkans; verify the importance of EU membership for FDI, caused reducing trade costs and improving connectivity. Thus, the new EU member states (NMS) and Western Balkans appear both as a home country and as a pre- entry destination to the EU. Then, we calculate trade costs indices for each selected country and partners over time and find that Europe and China are closely interconnected through trade and FDI. It means that stronger ties with China can be realized for the sample countries at the cost of easing relations with the EU. Finally, incorporating trade costs indices into the FDI model; we evaluate the impact of connectivity on FDI and estimate how BRI affected FDI in Europe. Additionally, we validate that the old framework of horizontal and vertical FDI not representative well and even new complex vertical or export-oriented FDI strategies are shifting today.
Sažetak
Uprkos nedavnoj zabrinutosti zbog sve većeg uticaja spoljnih investitora na Evropsku uniju (EU) i zapadni Balkan, razvijene evropske zemlje i dalje su dominantan izvor stranih direktnih investicija (SDI) u regionu, što potvrđuje koristi od članstva u EU. Istovremeno, ubrzano povezivanje i niži trgovinski troškovi u zemljama koje su u procesu pristupanja i susednim zemljama određuju rast SDI iz Kine, posebno putem "Belt and Road Initiative" (BRI). Korišćenjem panela podataka tokom 2000-2019 za 34 zemlje, koje čine 89% svih evropskih SDI, prvo se ispituju obrasci SDI širom Evrope, upoređuje se EU sa novim državama članicama i zapadnim Balkanom; proverava se značaj članstva u EU za strane direktne investicije, što dovodi do smanjenja trgovinskih troškova i poboljšanja povezanosti. Stoga se nove države članice EU (NMS) i zapadni Balkan pojavljuju i kao matična država i kao pretpristupno odredište u EU. Zatim, izračunavaju se indeksi trgovinskih troškova za svaku odabranu zemlju i partnere tokom vremena i nalazi se da su Evropa i Kina usko povezane trgovinom i SDI. To znači da jače veze sa Kinom, zemlje iz istraživanog uzorka, mogu ostvariti po cenu ublažavanja odnosa sa EU. Na kraju, inkorporirajući indekse trgovinskih troškova u FDI model, procenjuje se uticaj povezanosti na SDI i procenjuje se kako je BRI uticao na SDI u Evropi. Pored toga, potvrđeno je da stari okvir horizontalnih i vertikalnih SDI nije dovoljno reprezentativan, i da se čak i nove složene vertikalne ili izvozno orijentisane SDI strategije danas se menjaju.
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