Journal of East European Management Studie (JEEMS) is published by IMR Press from Volume 30 Issue 1 (2025). Previous articles were published by another publisher under the CC-BY licence, and they are hosted by IMR Press on imrpress.com as a courtesy and upon agreement.
, Juan José Durán Herrera 2, Juan Manuel de la Fuente Sabaté 31 Universidad de Burgos, Facultad de Ciencias Económicas y Empresariales, Spain
2 Autonomous University of Madrid, Spain
3 University of Burgos, Spain
Abstract
Eastern Europe nowadays represents an important and attractive economic area for foreign direct investment. Determinants of investments have converged with those of other European countries. However, it has been argued that a differentiated East-West structure still exists in Europe. This study examines the existence of such a structure from the novel perspective of psychic distance stimuli, showing no evidence of its persistence. Moreover, the results provide evidence on the fundamental role played by different dimensions of psychic distance, especially in levels of industrial development and language, as obstacles to foreign direct investments. On the contrary, distance in education is positively associated with investments, reflecting an efficiency-seeking MNE approach.
Keywords
- Psychic Distance
- Multinational Enterprise
- Direct Foreign Investment
- Conditional Logit Model
- Central and Eastern European Countries