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2018 | OriginalPaper | Chapter

3. Theoretical Model

Author : Hanna Makhavikova

Published in: Determinants of FDI in Central and Eastern Europe

Publisher: Springer International Publishing

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Abstract

This chapter considers the theoretical framework. We started by considering the basic model offered by Neary (Manchester School 70(3):291–314, 2002) which studies location choices in homogenous countries, and examined three scenarios: equal external and internal trade barriers, regional preferential trade agreements, and zero trading costs between member countries. Further, we implemented these three scenarios for heterogeneous countries with different market sizes, external tariffs, labour and installation costs and analysed how changed market characteristics influence the previous findings. Finally, we derived a FDI model.

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Title: Theoretical Model
Author: Hanna Makhavikova
Publisher: Springer International Publishing
Book: Determinants of FDI in Central and Eastern Europe
Print ISBN: 978-3-319-91877-8

Electronic ISBN: 978-3-319-91878-5

Copyright Year: 2018
DOI: https://doi.org/10.1007/978-3-319-91878-5_3

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