Macroecnomic Impacts of FDI in Transition Economies: A Meta-Study

In this paper, we conduct a meta-analysis of the literature that empirically examines the impact of foreign direct investment (FDI) on economic growth in Central and Eastern Europe and the former Soviet Union. We found that existing studies indicate a growth-enhancing effect of FDI in the region as a whole. The results of our meta-regression analysis suggest that the effect size and statistical significance of the reported estimates strongly depend on study conditions. In particular, the estimation period, data type, estimator, and type of FDI variable are important factors that explain the heterogeneity in the empirical results. The degree of freedom and the research quality greatly affect estimates of the FDI variable as well. We also found that the relevant studies fail to present genuine evidence of a non-zero FDI effect due to the presence of publication selection bias and insufficient numbers of empirical evidence. More research is necessary to identify the true effect.