CAN FOREIGN DIRECT INVESTMENT PROMOTE EXPORTS IN SLOVAKIA?

• Authors: Li Zheng-Zheng , Su Chi-Wei , Tao Ran , Lobont Oana-Ramona
• Languages of publication: EN

Abstracts

EN

In this paper, we investigate whether the knowledge capital model (Carr Markusen and Maskus, 2001) is satisfied in Slovakia by applying the bootstrap rolling window subsample test to examine the causal relationship between foreign direct investment (FDI) and exports (EX). This method provides more accurate evidence of a connection between these two variables considering structural changes. The empirical results show a positive correlation between FDI and EX and support the vertical FDI in the knowledge capital model in most sample periods. When FDI rises, EX will increase accordingly and vice versa. In addition, FDI exerted a negative effect on EX in 2011, which is attributable to the relative state of the situation at home and abroad. The findings illustrate that FDI and EX benefit from the free economic institution reforms and inexpensive resources. Therefore, the Slovakian government should improve tax reforms and maintain the stability of legislation to achieve mutual promotion between FDI and EX.

Keywords

EN

FOREIGN DIRECT INVESTMENT; EXPORTS; SLOVAKIA; CAPITAL MODEL

• Publisher: Institute of Slovak and World Economics and Institute for Forecasting, Slovak Academy of Sciences
• Journal: Ekonomický časopis (Journal of Economics)
• Year: 2019
• Volume: 67
• Issue: 2
• Pages: 135 – 156

Contributors

author

Li Zheng-Zheng

• Ocean University of China, School of Finance, No. 238 Songling Rd., Qingdao, Shandong, China

author

Su Chi-Wei

author

Tao Ran

author

Lobont Oana-Ramona