Abstract
This paper investigates the foreign direct investment (FDI) attractiveness for Greece as a host country compared with the rest of the EU countries. The main objective of this work is to identify the factors that improved or worsened Greece’s attractiveness during the last few years. An econometric model and a comparative index of FDI attractiveness have been constructed in order to identify the differences in the attractiveness of the countries. The results obtained prove that during the last few years Greece’s attractiveness as a host country for FDI has not only improved, but it also has a downward trend. The factors identified as crucial for the low FDI attractiveness in Greece are inefficient public governance, high taxation, inefficient infrastructure, and general macroeconomic conditions.
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Notes
The FDI, exchange rate, interest rate, exports, imports, industrial production, and labour cost variables have been taken from IMF, International Financial Statistics (various issues). The GNP, exports of primary commodities, fixed capital formation, population, and a number of university graduates variables have been taken from various publications of the National Statistics Service of Greece (Monthly Bulletin [various issues]). The source of the national patents variable is the OECD, Main Science and Technology Indicators (Monthly Bulletin [various issues]).
See Phillips and Person (1988).
A similar methodology is used in Pantelidis and Kyrkilis (1997).
The data used are mainly from World Bank, World Development Indicators and IMD, World Competitiveness Yearkbook.
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