SOCIAL EFFECTS OF FOREIGN DIRECT INVESTMENTS: A PANEL CAUSALITY ANALYSIS FOR THE CASE OF THE CEE

Abstract

Purpose: The paper focus specifically on the impact of FDI and its contribution to the effectiveness of spending, a review of literature has revealed many attempts to evaluate the determinants of spending (i.e., education, health, and R&D). This study offers a modern approach to FDI and investigates the causal relationship between FDI and social effect in the Central and Eastern Europe. Methodology: The study uses panel var for the period 2004-2015, and adopts a panel Granger causality analysis developed by Dumitrescu and Hurlin (2012) to assess the contribution FDI makes to social effect. The data were analysed with the use of R- Cran 3.5.1 (library: panelvar, plm). Implications: Modelling these circumstances may be a potential direction for future studies aimed at investigating the causality between FDI and social effect in the CEE.