THE IMPACT OF MONETARY POLICY ON FOREIGN DIRECT INVESTMENT

This paper deals with a topic of the impact of monetary policy on foreign direct investment (FDI). Particularly, it is focused on the introduction of euro and its effect on FDI of Slovakia. The objective of this paper was to preliminarily evaluate whether the introduction of euro in Slovakia had an impact on its FDI. The influence of euro introduction on Slovakian FDI inflows and outflows was tested using two sample t-test and the values of FDI inflows and outflows in the periods before and after euro introduction were graphically compared using boxplots. Statistically, any positive impact of introduction of euro on neither Slovakian FDI inflows nor FDI outflows was proved. So, the results of this paper are not in accordance with a predominating literature researching the topic. Nevertheless, further research using new variables and more advanced statistical and econometric tools will be necessary to specify the impact of euro introduction on both FDI Inflows and FDI outflows. (12)