Psychic distance and other determinants of the EU new member states’ outward foreign direct investment
研究了欧盟新成员国对外直接投资的决定因素，发现心理距离是地理距离的替代变量，且避税动机显著驱动投资，对研究新兴经济体对外投资有参考价值。
Research on outward Foreign Direct Investment (OFDI) has so far been focused on developed countries. However, the significance of emerging and transition economies is increasing. The literature review shows the gap in research on determinants of the EU NMS (European Union New Member States) OFDI, in particular regarding Psychic Distance (PD). The paper motivates theoretically and uses a gravity model to investigate the drivers behind OFDI from NMS. We apply Hausman-Taylor (HT), Poisson Pseudo-Maximum Likelihood (PPML), and Gamma Pseudo-Maximum Likelihood (GPML) estimators. These are the characteristics of the destination country that exert more significant influence than the origin, which raises scepticism about OFDI being stimulated by policy measures in the case of the NMS. A tax-avoiding motive strongly drives their OFDI. We contribute to the literature by showing that PD affects OFDI from the NMS and is an alternative to distance in kilometres, which is traditionally used in gravity models. Socioeconomic and psychic distances are robust alternatives, while other single-dimensional ones (language, industrial, democratic, or religious) are not. Our findings confirm that NMS’s OFDI strongly depends on the Inward Foreign Direct Investment (IFDI) from the counterpart economies.