Foreign investment drives economic growth in Europe, but policies matter more.
The article discusses what factors influence foreign direct investment (FDI) in Europe and how FDI affects economic growth. It finds that both economic policies and non-policy factors play a role in attracting FDI. In more advanced European countries, it's unclear if FDI leads to economic growth or vice versa. In Central and Eastern European countries, FDI has helped boost growth by increasing domestic investment. However, technology spillovers from FDI are less evident in these countries compared to developed economies. Overall, policies that enhance growth are more effective than specific support for FDI.