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Vol. 64, No. 4, pp. 353-378 (2013)

“Foreign Direct Investment and Economic Transformation —A Meta-Study—”
Ichiro Iwasaki (Institute of Economic Research, Hitotsubashi University), Masahiro Tokunaga (Faculty of Commerce, Kansai University)

In this paper, we conduct a meta-analysis of studies that empirically examine the relationship between foreign direct investment (FDI) and economic transformation in Central and Eastern Europe and the former Soviet Union over the past two decades. More specifically, we synthesize the empirical evidence reported in the previous studies that deal with the determinants of FDI and its effects on macroeconomic growth in transition economies. We also perform meta-regression analysis to specify the determinant factors of the heterogeneity among the relevant studies and the presence of publication selection bias in these research fields. We find that, although the existing literature report a statistically significant non-zero effect as a whole, a genuine effect is confirmed only in the study area of the determinants of FDI beyond the publication selection. In the literature regarding with the FDI macroeconomic effects, our meta-analysis suggests a need for further empirical evidence in order to identify the true effect.