Impact of Foreign Direct Investment on Poverty: Case of Transition Countries

Abstract

This paper undertakes the empirical investigation on the correlation between with inflow of foreign direct (FDI) and poverty in case of transition countries over the period of 2000-2016. Generalized Least Square (GLS) or Fixed Effect (FE) estimation method is employed for estimation. According to the result, inflow of FDI has significant role in reducing poverty in transition countries. The finding also indicates that government spending in public, better quality of government institution, and human capital also help to improve the welfare of poor population. However, the finding argues that trade probably increases poverty.