Comparative Economic Studies

, Volume 51, Issue 1, pp 20–50

Trade, Foreign Direct Investment, and Growth: Evidence from Transition Economies

  • Hiranya K Nath
Regular Article

DOI: 10.1057/ces.2008.20

Cite this article as:
Nath, H. Comp Econ Stud (2009) 51: 20. doi:10.1057/ces.2008.20


Using a fixed effects panel data approach, this paper empirically examines the effects of trade and foreign direct investment (FDI) on growth of per capita real GDP in 13 transition economies of Central and Eastern Europe, and the Baltic region from 1991 to 2005. A significant positive effect of trade on growth is a robust result for transition economies of this region. In addition, domestic investment appears to be an important determinant of growth. In general, FDI does not have any significant impact on growth in these transition economies. However, when we control for the effects of domestic investment and trade on FDI, it appears to be a significant determinant of growth for the period after 1995.


transition economies trade FDI growth fixed effects panel data model 

JEL Classifications

F14 F21 O52 P33 

Copyright information

© Palgrave Macmillan 2009

Authors and Affiliations

  • Hiranya K Nath
    • 1
  1. 1.Department of Economics and International BusinessSam Houston State UniversityHuntsvilleUSA

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