FOREIGN DIRECT INVESTMENT IN COUNTRIES OF THE FORMER SOVIET UNION: RELATIONSHIP TO GOVERNANCE, ECONOMIC FREEDOM

Abstract

The improvement of the economies of the previous land (FSU) would force substantial levels of foreign direct investment (FDI). The aim of this study is to appear at factors which may be instrumental in determinant this level of the FDI. It achieves this by establishing quantitative relationships between levels of FDI per capita to the year 2004 and three sets of indicators relating, respectively, to governance, economic freedom, and corruption perception. The paper demonstrates that the extent of FDI in FSU states has been determined to a giant extent by the degree of reform from a planned economy towards a market economy.