The effects of the Eurasian Economic Union on regional foreign direct investment and implications for growth
Kemme D.M. Akhmetzaki Y. Mukhamediyev B.M.
2021Routledge
Journal of International Trade and Economic Development
2021#30Issue 5643 - 660 pp.
The positive direct and indirect spillover effects of foreign direct investment on growth are often case specific and not necessarily uniform nor easily predicted. Effects of FDI due to international investment policy changes are often confounded by free trade and customs union agreements that occur simultaneously because trade may be a complement to or substitute for FDI. We review the effects of regional trade agreements on FDI and focus on the new Eurasian Economic Union (EAEU). With annual data from 1995 to 2019 for post-Soviet countries, three members, the Russian Federation, Belarus, and Kazakhstan and nine non-members, Armenia, Azerbaijan, Georgia, Kyrgyz Republic, Moldova, Tajikistan, Turkmenistan, Ukraine, and Uzbekistan, we estimate the EAEU integration effect on country FDI flows, post-2010. We control for other determinants, including infrastructure development, natural resource rents, potentially confounding trade flows, the financial crisis, sanctions against Russia and country fixed effects. The formation of the EAEU did not stimulate FDI and while GDP grew it was not associated with higher FDI. Further growth opportunities via FDI lie with relationships with countries outside the EAEU.
Economic integration , Eurasian Economic Union , FDI , Kazakhstan , post-Soviet countries , Russia
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Department of Economics, University of Memphis, Memphis, TN, United States
Economics Department, Narxoz University, Almaty, Kazakhstan
Economics Department, Al-Farabi Kazakh National University, Almaty, Kazakhstan
Department of Economics
Economics Department
Economics Department
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