American Journal of Economics and Business Administration

The Explanatory Variables of Outward Foreign Direct Investment: Panel Evidence

Nicholas Apergis, Dimitrios Asteriou and Kalliroi Papathoma

DOI : 10.3844/ajebasp.2012.207.215

American Journal of Economics and Business Administration

Volume 4, 2012

Pages 207-215

Abstract

Along with the traditional macroeconomic determinants of FDI, additional explanatory variables, such as the exchange rates, should be encountered in undertaking physical investment decisions, as these variables affect several comparative costs and the cost of lending. The goal of this study is to examine for the first time panel data evidence of Greek outward FDI flows directed to 16 EU and non-EU countries over the period 1997-2008, focusing on the relative importance of emerging variables on the determination of the direction of FDI. The results clearly show that-under different specifications-increases in the level of exchange, affect FDI flows directed from Greece to the host economies. Moreover, significant determinants for the streaming of the Greek FDI are the minimum wage rate and the labour productivity in the host economies as well as the price of the Greek physical capital.

Copyright

© 2012 Nicholas Apergis, Dimitrios Asteriou and Kalliroi Papathoma. This is an open access article distributed under the terms of the Creative Commons Attribution License, which permits unrestricted use, distribution, and reproduction in any medium, provided the original author and source are credited.