• ISSN: 2301-3567
    • Frequency: Quarterly (2013-2014); Monthly (Since 2015)
    • DOI: 10.18178/JOEBM
    • Editor-in-Chief: Prof. Eunjin Hwang
    • Executive Editor: Ms Jessica C. Xiao
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JOEBM 2016 Vol.4(5): 367-371 ISSN: 2301-3567
DOI: 10.18178/joebm.2016.4.5.419

Determinants of Inward Foreign Direct Investment in Greece

Pantelis Pantelidis and Effrosyni Paneta
Abstract— Foreign Direct Investment (FDI) plays a key role in the era of globalization, as it contributes significantly to the strengthening of national economies in many countries. FDI supports and enhances a country's economy, it improves infrastructure, contributes to the development of new techniques and skills and leads to an increase in the financial resources of the country. Therefore, FDI benefits a country’s economy in many ways. Thus more and more incentives are provided by various states to maintain and reinforce such investment in their territory. The aim of this paper is to identify and examine the factors affecting the flow of inward FDI in Greece. Using econometric techniques, we examine the factors that affect FDI flows into Greece for the period 1982-2013. From the results of the study, it seems that inward FDI is positively affected by Gross National Income, Exchange Rate and Openness of the Economy and is negatively related to Unit Labour Costs, Corporate Tax Rate and the Greek membership in the European Monetary Union. Therefore, in order to strengthen the attraction of FDI flows in Greece, there should be an appropriate institutional framework with a view to reduce taxes on corporate profits and make a strategic planning, which will aim to the further economic openness of the country and foster economic growth.

Index Terms— Foreign direct investment, Greece, international business.

Pantelis Pantelidis and Effrosyni Paneta are with the Department of Economics, University of Piraeus, Greece (e-mail: pantel@unipi.gr, efpaneta@hotmail.com).

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Cite: Pantelis Pantelidis and Effrosyni Paneta, " Determinants of Inward Foreign Direct Investment in Greece," Journal of Economics, Business and Management vol. 4, no. 5, pp. 367-371, 2016.

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