BOFIT Discussion Papers, Institute for Economies in Transition, Bank of Finland
No 3/2000:
An assessment of the Estonian investment climate: Results of a survey of foreign investors and policy implications
Terri Ziacik ()
Abstract: Credible economic reform has played a key role in
Estonia’s success in attracting significant amounts of foreign direct
investment. This paper analyzes two years of data from a survey of foreign
investors in Estonia to determine the major motivations to invest and the
greatest problems faced by investors. Results indicate that the labour
force and market-related factors are the primary motivations for investors
coming to Estonia, while bureaucracy, corruption, and labour quality are
the greatest problems. Ordered probit analysis of the factor rankings
supports previous findings that investor characteristics such as export
orientation, mode of entry, or industry can explain factor evaluation for
some, but not all, factors. This method can be used by policy makers to
identify whether certain types of investors are likely to be affected
differently by the host country investment climate.
Keywords: foreign direct investment; transition; Estonia; ordered probit; (follow links to similar papers)
57 pages, March 2, 2000
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