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Theoretical and Applied Economics
No. 2 / 2015 (603), Summer

Foreign direct investment and income inequality in Central and Eastern Europe

Varna University of Economics, Bulgaria

Abstract. The paper explores the impact of foreign direct investment (FDI) on income inequality in ten countries from Central and Eastern Europe (CEE) in the period 1990 – 2012. First, the theoretical and empirical literature on the distributional effect of FDI is outlined. Second, we discuss briefly general trends in FDI inflow and income inequality in the countries from CEE after 1990. Third, we estimate several fixed effects regression models and find that FDI has the potential to exert influence on income inequality but this effect varies depending on the level of education and economic development of the host countries.

Keywords: foreign direct investment, income inequality, Central and Eastern Europe, panel data.

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The Economicity. The Epistemic Landscape, Marin Dinu, 2016


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