Can Foreign Direct Investment Sustain CEE Countries’ Economic Growth and Development?

The role of foreign direct investment (FDI) in economic growth is perceived differently by the experts in the field. Some researchers argue that foreign direct investment can sustain the economic growth both directly, by supplementing the internal capital directed to the acquisition of fixed assets and indirectly, by stimulating the local investments. On the other hand, researches conducted at microeconomic level frequently underlined that “FDI per se” does not boost economic growth, as the effects of FDI on economic growth and domestic investments depend on many different conditions existing in the host country. The purpose of this study is to underline several major aspects related to the relationship between the foreign direct investment inflows and the economic growth and development of poorer EU member states, analyzing empirically a set of representative macroeconomic indexes covering three main directions – the volume of inward FDI; the economic growth of the receiving economy; the existing conditions in the host country. The results of the presented analyses demonstrate that a high volume of FDI inflows can sustain the economic growth of the Central and Eastern European countries but not necessarily will generate spillover effects, boosting the productivity and competitiveness of all firms, including domestic companies, and influencing, significantly and positively, their economic development.