THE NEXUS BETWEEN FOREIGN DIRECT INVESTMENTS AND LABOUR PRODUCTIVITY – PANEL DATA APPROACH
THE NEXUS BETWEEN FOREIGN DIRECT INVESTMENTS AND LABOUR PRODUCTIVITY – PANEL DATA APPROACH

Summary/Abstract: This research uses country-level data to examine if foreign direct investments affected labour productivity in selected Emerging European Economies in the more extended period 1997-2017. The panel data analysis includes the comparison of macro panel estimations on the total sample and the estimations with robust micro-panel methods and dummy variables in the two analysed sub-periods. Robust estimations support the evidence of a significantly positive link between foreign direct investments and labour productivity in the Western Balkans, Visegrad Group and the Baltic States after the Global Financial Crisis. Furthermore, there is evidence that foreign direct investments positively affected labour productivity growth on the total sample level. Based on the empirical evidence, the authors suggest that policymakers in the Western Balkans should establish measures to promote more significant foreign investments to boost labour productivity and real economic growth

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