Joel I. Deichmann

Foreign direct investment in Turkey: regional determinants

The uneven regional distribution of foreign direct investment (FDI) in Turkey poses an interesting question from the perspective of multinational firms (MNFs) and policy-makers alike. This paper focuses on the factors governing the location decisions of MNFs within Turkey with specific reference to policy implications. Using a conditional logit model, it is found that agglomeration, depth of local financial markets, human capital, and coastal access dominate location decisions for the aggregate sample of foreign investors in Turkey. This study reveals no evidence that public investment is successful in attracting MNFs to particular regions. Also importantly, the location determinants vary dramatically by broad industrial category, investment composition, and origin-country characteristics, including income category and region.

A Review of Software Packages for Data Mining

We present to the statistical community an overview of five data mining packages with the intent of leaving the reader with a sense of the different capabilities, the ease or difficulty of use, and the user interface of each package. We are not attempting to perform a controlled comparison of the algorithms in each package to decide which has the strongest predictive power, but instead hope to give an idea of the approach to predictive modeling used in each of them. The packages are compared in the areas of descriptive statistics and graphics, predictive models, and association (market basket) analysis. As expected, the packages affiliated with the most popular statistical software packages (SAS and SPSS) provide the broadest range of features with remarkably similar modeling and interface approaches, whereas the other packages all have their special sets of features and specific target audiences whom we believe each of the packages will serve well. It is essential that an organization considering the purchase of a data mining package carefully evaluate the available options and choose the one that provides the best fit with its particular needs.

Distribution of Foreign Direct Investment among Transition Economies in Central and Eastern Europe

This paper presents a regression model designed to explain the distribution of foreign direct investment (FDI) in the countries of Central and Eastern Europe. Locational variables are identified from geography and economics literatures on location theory and foreign direct investment. The dependent variable is cumulative value of investments in each host country, accounting for initial outlays as well as subsequent investments and reinvested profits. The results identify the most important determinants of FDI in the region (trade volume, followed by investment climate and density of transportation infrastructure).

Measuring the international digital divide: an application of Kohonen self-organising maps

With the help of a Kohonen self-organising algorithm, this paper presents a mapping and analysis of the global digital divide along with its main drivers. Several broad groups and subgroups are identified, consisting of countries that are similar in their digital development and in a number of other attributes. We find that the digital divide seems to occur synchronously with divisions in income, social, demographic and infrastructure measures. By examining a large dataset of 160 countries over a short period of three years, we find evidence of both convergence and divergence among the countries over time. We expect these findings to inform the ongoing debate on drivers of the International Digital Divide (IDD). In addition, this paper provides a novel visualisation of the digital divide and its predictors on a two-dimensional grid. Extensions of this work, with the availability of more years of data, could investigate the potential convergence of countries to particular patterns of digital development.

Origins of Foreign Direct Investment in Croatia: Application of an Expanded Gravity Model

This paper examines the origins of foreign direct investment (FDI) into the Republic of Croatia, paying special attention to gravity effects. The gravity model posits that interaction between two countries is positively associated with their mass and negatively associated with the distance between them. Six expanded gravity models are set forth to analyze FDI into Croatia, with dependent variables defined as cumulative FDI value from 2000 to 2009, FDI during the global recession (2008–2009), and FDI measured by the number of transactions. Results show that Croatia fits a distinctive transition economy scenario that favors follow-the-leader firms from nearby (especially EU) origins. Another key finding is the role of shared history, which favors firms from the successor states of the Austro-Hungarian Empire and Yugoslavia. Policy implications of the results include a call for government action to enhance FDI facilitation and overcome remaining barriers for foreign firms.

Socioeconomic Convergence in Europe One Decade After the EU Enlargement of 2004: Application of Self-Organizing Maps

This article uses self-organizing maps (SOMs) to examine convergence between European states, giving special attention to the states of Central and Eastern Europe (CEE) that joined the European Union (EU) during its monumental expansion in 2004. To augment the literature on income convergence, the robust conceptual framework employed here is based upon Terry Jordan’s much broader socioeconomic and political definition of Europe. Using associated variables, the study applies the Kohonen data visualization technique to highlight statistical clustering and movement of countries across three time periods from 2001 to 2013. Kohonen U-matrix and component maps reveal several distinct clusters of countries that remain stable over time, including Europe’s industrialized core and Scandinavia, as well as a cluster of laggard Soviet successor states at the opposite extreme. The eleven new EU countries that had been part of the eastern bloc show evidence of real (β-) convergence toward the European core, but at various paces. The Baltic states of Lithuania and Latvia experience some of the greatest observable convergence, followed by Estonia, the Visegrád states, and the former Yugoslav states of Croatia and Slovenia. Other countries that demonstrate considerable movement during the time period under investigation include some crisis-battered Mediterranean countries, plus Montenegro, Kosovo, and Turkey. While most of the evident statistical mobility is positive, Ireland experiences nominal and real divergence during the period 2011–13. In the context of Europe’s ongoing recession and the aftermath of the UK’s referendum, these findings have implications for two uncertainties: the very survival of the EU and its prospects for further expansion.

Historical Legacies and Foreign Direct Investment in Bosnia and Herzegovina

Historical Legacies and Foreign Direct Investment in Bosnia and Herzegovina This paper examines the origins of foreign direct investment (FDI) in Bosnia and Herzegovina (BiH) with special reference to historical legacies. BiH is a very interesting case because of its position on the frontier of Europe, a region with a rich cultural history marked by alternating periods of coexistence and violence. Because the country has spent time under the Ottoman, Austro-Hungarian, and Yugoslav flags, particular attention is paid to the role of history in impacting inflows of FDI. Five models are specified using various dependent variables to measure FDI, and all uphold the importance of historical legacies and cultural proximity. Equally interesting is the absence of significance among traditional gravity variables in this unique investment landscape. Policy implications include the need for government to assist firms in overcoming concern about instability, corruption, and a complex permitting process. As little has been published on FDI in BiH, future research suggestions are presented.

Using SOMbrero to examine the economic convergence of European countries from 2001–2013

This paper uses SOMbrero visualizations to examine two socio-economic dimensions of European states, generated by a factor analysis of time-series data from 2001–2013. We analyze SOMs for 41 countries with regard to “Old Capital” and “New Capital”, two factors that are generated from 12 variables. SOMbrero reveals evidence of various convergence paths over time for these two factors. This approach also clearly uncovers the differential impacts of the European recession upon clusters of European countries. In conclusion, we demonstrate that SOMs are a useful tool for better understanding European convergence.

Miami, New Orleans, London, Belfast, and Berlin: An Analysis of Geographic References in U2's Recordings

At the intersection of geography and popular music, this article analyzes the spatial dimension of the rock band U2’s music recordings, with additional consideration given to song and album titles as well as album art. U2 is among the most prolific musical acts of the past four decades, having recorded 13 studio albums in addition to numerous singles and B-sides. Much of U2’s music is richly woven with images of place. Reference to geography ranges from the explicit to the implicit, and U2’s lyrics cite locations on six continents. Among these, Europe and the United States are cited most frequently, while places as diverse as Ethiopia, El Salvador, New Zealand, Chile, and China are also featured in the band’s lyrics. It is argued that U2 infuses titles and lyrics with locations for several reasons. First, lyrics reference locations that have been important for the band’s creative development. Second, the band uses place-specific events to advocate for change by promoting causes that transcend those locations. Finally, given the strong representation of Europe and the United States in U2’s recorded material, it is likely that the band deliberately invokes images of place to appeal to its fans and increase music sales.